Your creditors don’t want you to know this, but it’s true. Bankruptcy can stop lawsuits. Unfortunately, most people don’t do anything when a creditor sues them. They don’t even bother to show up in court. . . And that’s a huge mistake.
You see, once you are served with a complaint, you have only a limited amount of time to respond – usually about 30 days or so. If you don’t file a response and you don’t show up in court, the judge will enter a default judgment in favor of the creditor who filed the lawsuit against you. Once a creditor obtains a default judgment against you, it is free to pursue a variety of remedies against you to collect the money you owe including:
- Garnishing your wages; and
- Levying on your bank accounts and other personal property.
Additionally, once a creditor obtains a judgment against you, it becomes a lien against all of your property. You will have to pay the judgment in full before the creditor will release the lien. And to add insult to injury, interest will accrue on the judgment until you pay it off.
If you’re being sued, don’t ignore the lawsuit. Call an experienced bankruptcy attorney will explain all your options to you, including how bankruptcy can be used to stop that lawsuit.
Not only can bankruptcy stop a lawsuit, it can:
- Prevent your creditors from obtaining judgments against you;
- Protect your property from collection efforts by your creditors;
- Wipe out most of your unsecured debt. . .permanently; and
- Stop harassment from creditors and collection agencies.
If you file bankruptcy while a lawsuit against you is pending, the automatic stay prevents the creditor from moving forward with the lawsuit. The creditor must dismiss the lawsuit against you. Yes. . . it really is that simple. Of course, the banks and credit card companies don’t want you to know how easy it is. And unless you have engaged in some type of fraud in obtaining the credit or you fall within a few very narrow exceptions, most of your unsecured debts will be discharged.
If a creditor has already obtained a judgment against you, the automatic stay stops the creditor from making collection efforts against you and your property. That judgment lien against your property probably won’t be worth the paper it’s written on once you file bankruptcy because the Bankruptcy Code allows you to avoid certain judgment liens if they impair an exemption.
A bankruptcy attorney can tell you exactly what that means as well as answer any other questions you might have about bankruptcy. Remember, you are not in this alone. Professional Law Groups are dedicated to helping good, hardworking people just like you who have run into financial difficulties and are looking for real solutions.
