Derek Milo Couture v. Burlington Hous. Auth.

No. 97-CV-127 (D. Vt. July 27, 1998). ; Clearinghouse Number: 52210

Description

Bankruptcy Court Erred When It Lifted Automatic Stay and Allowed Eviction of Public Housing Residents

Abstract

The district court held that the bankruptcy court was wrong when it found that debtor-appellant public housing residents had no possessory interest in tenancy when they filed for Chapter 7 bankruptcy. Appellant residents in public housing were served with a notice to vacate their home when they fell behind in rent payments. Housing authority filed an ejectment action, but the parties settled and set up a repayment schedule. When appellants again fell behind, the state Department of Social Welfare (DSW) paid their current rent and the arrearages due with appellants’ Aid to Families with Dependent Children grant. Housing authority several months later nonetheless served a writ to repossess the apartment. Approximately a week later, appellants filed for bankruptcy to stay an eviction automatically. DSW continued to pay appellants’ current rent obligations but stopped payments for the rent in arrears. Housing authority filed for relief from the automatic stay; the bankruptcy court, finding that the settlement agreement established that the lease had been terminated, granted the relief. Tenants appealed, and the district court found that the lease reverted to the debtor when the housing authority did not assume the lease after appellants filed for bankruptcy and that housing authority’s nonassumption of the lease was not the same as lease termination. The court ordered that appellants be restored to public housing. Section 525 of the Bankruptcy Code, the court added, protected appellants from housing authority pursuing eviction for the discharged debt. [Editor’s note: According to appellants’ counsel, this case should buttress arguments for preserving the automatic stay of public housing tenants who seek Chapter 7 protection.]

Additional Information

Attorney Information
Appellants represented by Lila Shapero, Vermont Legal Aid, 264 N. Winooski Ave., Burlington, VT 05402; 802.863.5620.
Docket Date
1998-07-27 00:00:00+00:00