When your debts become overwhelming, your creditors can take various legal actions to recover their money from you. Some file lawsuits, which can be overwhelming and lead to court orders that could be difficult to fulfill in your financial situation. Filing for bankruptcy can resolve some of these problems and give you a fresh start. However, bankruptcy cannot eliminate all pending lawsuits against you. The decision you make will depend on the kinds of lawsuits you face.
Talk to an experienced bankruptcy attorney about all legal actions against you and whether bankruptcy can help your situation. They will explain how bankruptcy works, areas in your life it will help, and what to do with other lawsuits and legal actions that bankruptcy will not help. Your attorney will guide you through all legal processes, providing support to achieve a favorable outcome.
Types of Lawsuits Bankruptcy Cannot Help
Bankruptcy is recommended when your debts become overwhelming and your creditors start acting against you. Your debts can become overwhelming when your financial situation changes, making it impossible to meet all your obligations. Before filing for bankruptcy, you can try other debt management strategies, like renegotiating with your creditors for favorable repayment terms or debt restructuring. Bankruptcy should be the last resort, after all other debt management strategies fail to yield expected results. Sometimes, different techniques work, but they may not work if you owe more than you can pay with your current income.
When your creditors realize that you are not making adequate effort to repay your debt, they can take action against you. Some start sending endless reminders, which can escalate into harassment. Others can hand the matter over to debt collection agencies, who use any strategy to recover from you. They may contact you persistently via email, texts, calls, or in person, which can escalate to harassment. Other creditors file lawsuits against you in a civil court. They enlist the help of a judge to compel you to pay what you owe on their terms and conditions.
If a creditor wins in a civil case, you must abide by the payment terms the court will set. Otherwise, you could face additional legal issues. This can bring a lot of stress to your life, especially if there is more than one lawsuit to deal with. Bankruptcy can provide the relief you deserve and give you a chance to start life on a clean slate. However, know that bankruptcy cannot handle all pending lawsuits against you, but only some.
Creditors have the right to take legal action against you to compel you to pay what you owe them. While you cannot control your creditor’s actions, you can protect yourself by filing for bankruptcy. Bankruptcy will not help you avoid all legal actions against you, but it has an automatic stay order that can temporarily stop some lawsuits and other collection actions against you. Generally, bankruptcy will stop legal actions that involve creditor money judgments. Different legal matters against you will continue even after filing for bankruptcy.
For example, if there is a criminal case against you, the circumstances of that case will not change after filing for bankruptcy. You can still be arrested and face a criminal trial. Filing for bankruptcy will also not affect a divorce or marriage dissolution case. It will not change child support and custody matters, but it can delay some legal proceedings. If there is a pending eviction case against you and a court has already granted your landlord possession, bankruptcy will not affect this matter.
Knowing this before filing for bankruptcy can inform your decision-making. It will also prepare you for what to expect and guide your actions after filing for bankruptcy, especially regarding legal matters that will remain unaffected after filing for bankruptcy. A skilled bankruptcy attorney can also help you determine your options and the right strategies for a favorable outcome in all pending legal matters.
Types of Lawsuits You Can Stop with Bankruptcy
The good news is that a bankruptcy can stop a pending lawsuit, especially one based on money you owe or failed to pay. Generally, a bankruptcy will affect your assets and debts. If you injured someone and could not pay them, borrowed money and could not pay, or damaged a person’s property and cannot pay them, these types of debts will be affected by bankruptcy. They are a part of your debt or obligations. Here are some lawsuits and legal claims that you can stop with a bankruptcy application:
- Pending credit card balances
- Payments you should pay after breaching a contract
- Any financial dispute with your business partner
- Compensation from a personal injury lawsuit, whereby you are the negligent party, for example, if someone was injured in a car accident that was your fault
- Foreclosure for a home or any other property
- Any claim for deficiency balances, or the amount you owe after your property is auctioned
- An eviction, mainly if you have not received an order for possession from the court before the filing process
If some of your pending lawsuits are about a dischargeable debt, filing for bankruptcy will automatically wipe out the debt, nullifying the pending lawsuit. However, this does not always happen this way. The court can allow your creditor to pursue the lawsuit, even after you file for bankruptcy. In this case, your skilled attorney will advise you on your options, including negotiating for favorable repayments with your creditor.
In cases where filing for bankruptcy automatically eliminates your debt obligation, you will not have to worry about a pending lawsuit or any other action by your creditor. This works very well through the bankruptcy tool’s automatic stay. This automatic order stops any collection action by your creditors when you file for bankruptcy. The order prevents your creditors from continuing any collection effort against you, including an attempt to win a civil lawsuit against you. The automatic stay order prevents collection activities by your creditors to maintain the status quo.
An automatic stay order freezes the collection action so that the court can determine what you own in terms of assets and the best way to divide these assets among your creditors.
Creditors Can Still Take Action after Automatic Stay Order
The automatic stay order stops any activity by your creditors to allow the bankruptcy court to organize your debts and assets. However, a creditor can seek permission from the court to pursue their debt after the automatic stay order is in place. If their debt is nondischargeable, the court can permit them. Thus, you can still face a lawsuit even after filing for bankruptcy.
Creditors can do this by asking the bankruptcy court to list the order to allow them to proceed with the lawsuit against you. The judge will consider the circumstances of such requests to grant or deny the request. If the circumstances are right and the court grants the request, the creditor's lawsuit or action against you will proceed. The types of cases that judges allow to continue after the automatic stay order are foreclosures and evictions. They can enable other lawsuits to proceed under the following circumstances:
- If the outcome of the lawsuit will not affect your bankruptcy
- If the creditor will likely suffer financial harm by waiting for the conclusion of the bankruptcy case, for example, home lenders are likely to lose money if they wait to foreclose homes without equity
- If the lawsuit’s outcome will bring out an issue that should be resolved in your bankruptcy case, for example, if there is a fraud allegation against you, the outcome of such a case can determine whether your debt should be wiped out or discharged by a bankruptcy petition
- If the lawsuit is a matter that can be resolved in a bankruptcy court, but it is costly for the litigants to start the case afresh.
In some cases, creditors have the right to pursue the case to the end. However, they must request the court’s approval before continuing their cases against you. For example, if there is a pending enforcement action against you by a government agency, filing for bankruptcy can delay the case for some time. However, the agency can file a motion with the bankruptcy court to lift the automatic stay order to allow the agency to pursue the matter against you. Although the agency has the right to pursue the case, it needs the bankruptcy court’s approval before taking further action. If the circumstances allow, the bankruptcy court will allow such a case to continue.
Filing for Bankruptcy After Losing a Debt-Related Lawsuit
If your creditors have started taking legal action against you, delaying filing for bankruptcy may not be a good idea. If your creditor files a lawsuit against you and they win, filing for bankruptcy will not impact that matter. For example, if your creditor gets a judgment lien on an asset, removing that lien with a bankruptcy will be difficult. A skilled bankruptcy attorney will advise you to file for bankruptcy before the final judgments on lawsuits against you are issued. The automatic stay order will prevent your creditor from pursuing the matter. This will also give you enough time to strategize, so you will be ready if your creditor continues the lawsuit.
Additionally, filing for bankruptcy while your pending lawsuits can prevent a judge from entering a fraud judgment against you. A fraud judgment will affect how the bankruptcy court discharges your debt. If a court finds you guilty of fraud, the affected debt becomes non-dischargeable, meaning you will take responsibility for paying it.
However, this does not mean bankruptcy will not help after losing a lawsuit. If you still have other pending debts or lawsuits, an automatic stay order after filing for insolvency will give you a break on these other matters. It will help, even in cases where a creditor can get a wage garnishment order against your bank account or paycheck.
A bankruptcy will also protect your remaining assets from creditors. A creditor cannot sell your assets to recover their debt once you file for bankruptcy. Talk to your attorney about any judgment lien against your property to understand how to avoid collection after filing for bankruptcy.
How To Stop an Eviction Through Bankruptcy
Losing your home is possible when you fall behind in payments. Your landlord can file a case against you in a civil court, seeking the court’s approval to evict you from the home. A case like this can result in an eviction if you do not do something to protect yourself. Filing for bankruptcy could be the solution to temporarily stop any action by your landlord as you work with a bankruptcy court to manage your debt.
When you file for bankruptcy, your landlord can easily proceed with an ongoing eviction process. However, the bankruptcy court requires them to adhere to some rules, especially those that respect your tenancy rights. Thus, filing for bankruptcy protects you as you organize your debt payment with the help of a bankruptcy trustee. The time frames for these processes are usually short, and the rules set by the bankruptcy court are not always easy to implement. A skilled bankruptcy attorney can help you determine your rights and options for a favorable result.
Timing is usually critical when using bankruptcy to stop some pending lawsuits. If you file for bankruptcy before your landlord receives an eviction judgment from the court, an automatic stay order will be sufficient to prevent the landlord from proceeding with the matter. If you file your case after the eviction judgment is in effect, the landlord has the right to proceed with the eviction, provided they abide by the rules set by the bankruptcy court.
However, this does not mean an automatic stay will stop your landlord from pursuing the matter. They can request the bankruptcy court to allow them to pursue the matter. If they have a valid ground for making this request, for example, if the eviction case has been pending for over a year, the court can grant their request. You should ask the court to allow the automatic stay order to remain in place to counter such an action by your landlord.
The court can allow or deny your request to allow an automatic stay order to remain in effect based on the circumstances of your case. For example, if your landlord proves that you are endangering the property or using it to manufacture or sell illegal drugs, the court will deny your request. Armed with such evidence, your landlord can present a certification to the court to be allowed to carry on with the eviction. You can fight the certification to prevent the eviction from happening. However, you must attend a court hearing about the matter and use compelling statements and evidence to counter the arguments and evidence from the landlord.
Remember that a bankruptcy petition will not stop a landlord who has already obtained an eviction or court order to repossess your home. However, you can get a court order or continue the automatic stay order to stop the landlord from acting until you can manage your debt. Working with a skilled attorney will ensure you understand all possible options to save you from an eviction and any other legal action by your creditors. Your attorney will also advise you to take quick action before you lose a case against you.
The bankruptcy law is complex and challenging to understand without legal help. Bankruptcy attorneys are trained and experienced in this law and related laws. They are familiar with bankruptcy court processes and can help you navigate them easily. A bankruptcy attorney is essential to talk to when your debts become overwhelming and you start considering filing for bankruptcy. They will assess your financial situation to advise whether filing for bankruptcy is a good idea.
An attorney will discuss the possible outcomes of all lawsuits against you if you file or do not file for bankruptcy, and help you choose the right move for a favorable result.
Find a Reliable Bankruptcy Attorney Near Me
Bankruptcy is an excellent tool for managing overwhelming debts when all other debt management strategies fail to produce expected results. However, you must carefully use it to achieve outstanding results. Engaging the help of a bankruptcy attorney is advisable to make the right decisions and to navigate the complex bankruptcy process successfully.
Filing for bankruptcy in San Diego can help with some pending lawsuits by your creditors. It can stop some legal actions by your creditors to collect their money from you. At San Diego Bankruptcy Attorney, we can help you understand how various lawsuits and actions against you will be affected if you file for bankruptcy. We can also help you know other available options and strategies that can help if a particular lawsuit is not affected by a bankruptcy.
Additionally, we can help you with the bankruptcy process, protect your rights, and support you through all legal processes until you are satisfied with the outcome. Call us at 619-488-6168 to learn how filing for bankruptcy can benefit your financial situation.
