Lawsuits and Bankruptcy

: Reese Baker & Associates

  Filed under: Bankruptcy Information

lawsuitsIf you have defaulted on your debt payments you could be sued by your creditors for repayment. Lawsuit consequences can range from wage garnishment to asset seizure and liquidation. Finding yourself on the receiving end of a creditor lawsuit can be serious, but you do have options for fighting back.

Order Of The Court

One of the benefits of filing for bankruptcy is that your filing petition triggers a court order that halts all collection actions against you. The court order, called the automatic stay, notifies your creditors of your filing and prohibits them from any further collections. This means you get relief from creditors, and your property and paycheck are protected from seizure while you work to resolve your debts through bankruptcy.

Even after your debts have been discharged in bankruptcy you are protected from lawsuits of collection. The exception to this rule is for any debts that were not eligible for inclusion in the discharge or jointly held debts, which could leave the additional party tied to the joint debt held solely liable. If you are served with a lawsuit regarding a debt before, during or after a bankruptcy filing, notify your College Station bankruptcy lawyer right away. It is important they follow up with the creditor to ensure their claims are unfounded.