- Free Consultation: (202) 448-5136 Tap Here To Call Us
File Bankruptcy to Stop a Lawsuit
If a creditor sues you on a debt, you should know that you can file bankruptcy to stop a lawsuit. A creditor may sue you for the debt on repossessed car, broken lease, or credit card. Or a former lender may sue you for a deficiency judgment from a foreclosure. An individual plaintiff may claim that you have breached a contract or may seek damages from an accident. File bankruptcy to stop a lawsuit on a debt that you cannot or should not pay.
File bankruptcy to stop a lawsuit
When you file bankruptcy the “automatic stay” takes immediate effect. The automatic stay is a nifty feature of the Bankruptcy Code that orders your creditors to cease all collection attempts. That includes lawsuits. The bankruptcy court will find liable for damages litigants who violate the automatic stay.
In one scenario, a plaintiff may sue you for a large sum. If you have no affirmative defenses or cannot afford to mount a defense in the litigation, then you should consider filing bankruptcy to stop the lawsuit.
In another scenario, an aggressive creditor (Midland Funding, American Express, On Deck Capital) may sue you in order to lien against your home or to garnish you bank accounts or wages. You can not only file bankruptcy to stop the lawsuit, but the bankruptcy will also discharge the underlying debt.
Bankruptcy does not stop every type of lawsuit
Bankruptcy does not halt lawsuits for divorce, or for the establishment of paternity, child custody, or child visitation.
In addition, where a creditor alleges that a debt may be nondischargeable, bankruptcy may delay but not stop the lawsuit. For instance, bankruptcy may only temporarily stay the lawsuit if you are being sued for fraud or for an intentional injury. In those cases, the bankruptcy court will likely allow the lawsuit to move forward to determine whether the debt is dischargeable in your bankruptcy.
Talk to an attorney if you get sued
In many cases, but not in every case, it can be a smart choice to file bankruptcy to stop a lawsuit. If you get sued, talk to an experienced bankruptcy lawyer to discuss your options.
They Called. They're Glad They Did.
Brian Lee from Lee Legal was an amazing attorney to work with. He took his time, reviewed my documents and we discussed my situation thoroughly. He explained the process and my options as well as gave his recommendation. Not only did he assist, but he ensured that I knew this...
I was very nervous and scared about going through this process. But Brian was very knowledgeable and helped me through it. I was notified about any and all updates to my case and he was very responsive when I had questions regarding any concerns I had. Although a bit nerve...
Brian provided me with a very detailed analysis about my potential case after our first consultation. He promptly responded to all my complex questions, especially navigating student loans and some tax discussions. He is very professional and experienced at what he does, I would...
I've had the pleasure of working alongside Brian V. Lee for several years, and I can say without hesitation that he is one of the most knowledgeable bankruptcy attorneys in the DMV area. Brian's command of Chapter 7, 11, and 13 practice is exceptional, and his clients in the DC...
Brian has the amazing talent of taking complicated legal matters and distilling them down to seamless, frictionless resolutions. He is a phenomenal problem solver and a trusted advisor.
Brian is both warm and professional. He helped me navigate a financial issue that I had not been looking forward to working on and he made the entire experience non-stressful, receiving a lot of anxiety I had around the matter. He is straight forward and a fantastic problem...
I had the opportunity to work with Brian at a time when I was challenged by a professional setback and forced with the challenge of making some very difficult legal decisions. Additionally, I worked with him again as I was dealing with some financial issues pertaining to my...
Still several years from Public Service Student Loan Forgiveness and saddled with significant student loan payments in proportion to my income, I came to Lee Legal to explore the bankruptcy path. Through his counsel, Brian took the fear out of the process and helped me to...
