Bankruptcy to avoid lawsuit

bankruptcy photo gavel
Can I stop a lawsuit by filing bankruptcy?

Bankruptcy can be a valuable tool to stop a lawsuit.  It depends, of course, on what kind of bankruptcy you file and if your debts are dischargeable or nondischargeable.   Many people file what is called a preemptive bankruptcy where they file after being sued by a creditor but before a judgment is actually entered against them.   Other times filing a bankruptcy after a judgment has entered is the only option.  You may need to figure out if you are still liable for the judgment that was entered against you and also see if the debt is nondischargeable in a bankruptcy proceeding. These kinds of debts include things like student loans, criminal fines and alimony/child support.

Just filing a bankruptcy and getting a discharge won’t be able to help you in a judgment if your creditor lien has attach to your assets, but you may be able to do a lien avoidance action to remove the judgment lien from the property.  These kinds of actins are very fact specific and you need to consult with an experienced bankruptcy lawyer to determine is this is even possible in your situation.  There are conditions you’ll have to meet in order to be able to qualify for a lien avoidance. Most of the time though your bankruptcy filing will stop a pending lawsuit against you. It can wipe out a wage garnishment order and remove your obligation to re-pay the debt.

If you are being sued bankruptcy can stop the lawsuit and discharge the debt. The automatic stay that occurs after filing for bankruptcy will stop the lawsuit. However, some lawsuits can continue after the bankruptcy is closed or if the creditor petitions that the automatic stay be lifted. In order to know if a bankruptcy will stop you from being sued you should contact an experienced bankruptcy lawyer and set up an appointment in Utah call the Law Office of Douglas Barrett at 801-221-9911.

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