How Bankruptcy Can Stop Lawsuits and Garnishments
Stopping Lawsuits
Most lawsuits will be stopped by the filing of bankruptcy, and some will end completely. Almost all lawsuits will stop the moment the case is filed because an automatic prevents most creditors from continuing the lawsuit to collect a debt against a bankruptcy debtor.
The automatic stay is like a restraining order that stops creditors from trying to collect a debt. It protects the debtor until they receive a discharge from their debts, or until the creditor obtains relief from the stay. The biggest factor on whether or not the lawsuit will go away forever is whether or not the debt you are being sued for is for a debt that is dischargeable in the bankruptcy case itself. If you are filing for bankruptcy and the debt that is the basis of the lawsuit will be written off in the bankruptcy case, there is no longer anything to fight over and the lawsuit will likely end when you get your discharge. For most standard collection lawsuits, the bankruptcy will often finish the matter.
Filing for bankruptcy is often used to put an end to collection lawsuits, and can provide relief in many other types of suits.Chapter 7 and Chapter 13 bankruptcy provide different kinds of relief, so even if a Chapter 7 won't discharge a debt,Chapter 13 might help manage the matter and provide an affordable repayment plan, and might help reduce other debts to help the borrower repay what is required. If you are being sued, consider talking to an experienced attorney to determine if your suit is the type that will be dealt with in a bankruptcy, whether or not bankruptcy makes sense in your case and if it can provide relief and protection for you.
Stopping Garnishments
Filing for bankruptcy will also stop wage garnishments and bank attachments. The stay applies to your creditors and acts as an order directing them to stop the garnishment immediately. Depending upon the timing, you may or may not get back any money that has been previously garnished. Because it's time-sensitive, you should contact a bankruptcy attorney right away if you're considering bankruptcy as an option. Discussing your options with a bankruptcy attorney as soon as you receive the lawsuit will give you enough time to head off any embarrassing garnishments.
Call us today at 330-605-3508 if you're facing a possible garnishment. You'll need to know your options before it's too late.
