Can I File for Bankruptcy When Being Sued?

Facing a lawsuit is a frightening experience and may lead you to wonder if it is possible to file for bankruptcy when being sued. The answer is that it is possible to file for bankruptcy protection when litigation is ongoing. In some cases, if you file for bankruptcy when being sued, the bankruptcy can also help to stop the lawsuit in its tracks. 
Deciding whether to file for bankruptcy when being sued is a complicated choice to make and you should speak with a Melville, NY bankruptcy lawyer for assistance in understanding how bankruptcy will affect your litigation.  Call Ronald D. Weiss, P.C. today to learn more about how a bankruptcy lawyer can help you.
You Can File for Bankruptcy When Being Sued
Many creditors will file lawsuits against you to try to collect the money that you owe. A credit car company, for example, could take you to court and get a judgment against you. A landlord can file a legal claim to try to get you evicted if you are not paying your rent and a mortgage lender could go to court and pursue a judicial foreclosure.
If a creditor does get a judgment against you in court, this could have serious consequences. Not only would the judgment show up on your credit report but it would also make it possible for the lender to take further legal actions like garnishing your wages so you take home less money or putting a lien on property so you cannot sell it.
Fortunately, bankruptcy could stop or slow the lawsuit or could resolve the underlying debt problems that are leading to the creditor’s legal action. If you file for bankruptcy protection, an automatic stay goes into effect right away. The automatic stay requires creditors to stop any ongoing or future collections activities against you. This can include stopping foreclosures, repossessions and lawsuits.
If a lender wants to continue trying to collect after you have filed for bankruptcy, the lender would need to petition the court or file a motion for relief from automatic stay. Essentially, the lender would have to convince the court to give it permission to continue collections activities despite the bankruptcy. This is not given in every case.
The bankruptcy filing will allow you to deal with your debts proactively, entering into a repayment plan or having the debts discharged. This means there should be no reason for the lender to pursue continuing legal action after your bankruptcy filing unless the lawsuit is for a debt that cannot be discharged in bankruptcy.
If you are being sued for reasons other than unpaid debts, such as a personal injury claim, then the bankruptcy could still potentially help you to avoid having to pay for judgments against you.  You cannot discharge certain kinds of judgments such as judgments that victims obtain if you have caused death by DUI, but other lawsuit damages can be included in a bankruptcy filing.
You should speak with a Melville, NY bankruptcy lawyer about the impact a bankruptcy filing will have on litigation pending against you. Call or contact Ronald D. Weiss, PC today.