What Happens to My Lawsuit When I File Bankruptcy?

gold and brown gavelWhen you file a personal bankruptcy, the automatic stay immediately goes into effect and prohibits any further collection activity against you. If a creditor or debt collector willfully violates the automatic stay, you can recover your actual damages, including attorney’s fees and costs. In certain circumstances, the court may even award punitive damages.

When we file your bankruptcy case, the court provides notice of the filing to your creditors. If you have a lawsuit pending against you, we will file a Suggestion of Bankruptcy in the  action to ensure that the court and the parties to the lawsuit have notice of your filing.

It is important to note that your creditor may attempt to pursue claims against you within your bankruptcy case. The most common allegations are fraud, embezzlement, or other claims that would make the debt owed to the creditor non-dischargeable. This type of lawsuit within a bankruptcy case is rare. Most creditors do not want to spend the time or money, especially if their likelihood of success is doubtful, or it is unlikely they will ever fully recover from you.

If you are concerned about creditors pursuing their claims in your bankruptcy case, it is important to consult with us as soon as possible.

Please keep in mind that every case is different. If you have questions about filing a personal bankruptcy or how filing bankruptcy will  impact your pending lawsuits, and you would like to schedule a no-cost consultation, please contact our office by completing the form on this website or calling us at (954) 280-5066.

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