You may already be struggling financially to the point that you cannot keep up with your monthly bills. But to make these matters worse, you may incur the added expense of legal fees should someone attempt to pursue a lawsuit against you. Desperate for some sort of financial relief, you may seriously contemplate a bankruptcy declaration, if this is even a viable option for you at the moment. Well, for this, please continue reading to learn whether a bankruptcy filing can stop a pending lawsuit placed against you and how an experienced Louisville, Kentucky consumer bankruptcy lawyer at Schwartz Bankruptcy Law Center can help determine whether you have legal options of your own during this time.
Can a bankruptcy filing stop a pending lawsuit placed against me?
In short, certain lawsuits can and will be stopped when you file your bankruptcy petition. Namely, lawsuits pursued by your creditors looking to collect the outstanding debts you owe them. This is because your bankruptcy filing triggers an automatic stay. This court order may prevent your creditors from continuing or starting any collection activities, such as attempting to win a money judgment in a civil lawsuit. In this way, you may be allowed some breathing room while you, your bankruptcy trustee, and the Kentucky bankruptcy court sort out how to pay off and eliminate certain debts.
However, it is worth mentioning that your creditors may still make efforts to petition the bankruptcy judge to lift the automatic stay and proceed with legal action against you. This is especially if they can prove that they will otherwise face financial harm or that the lawsuit will need to decide on an issue that affects your bankruptcy case directly. In addition, you must understand that a bankruptcy filing is not the end-all-be-all resolution for all legal actions potentially pending against you. That is, your bankruptcy case cannot and will not pause or prevent criminal law cases, family law cases (i.e., child support and alimony cases), and most eviction cases after the state court grants the landlord possession.
Am I allowed to pursue a lawsuit during my bankruptcy proceedings?
Contrastingly, you may not find yourself being the regretful defendant of a civil lawsuit but rather wanting to be the plaintiff of one. You may think this to be too tricky to juggle with your ongoing bankruptcy proceedings; but at the same time, you may have the rapidly approaching statute of limitations in mind. Well, you may be glad to learn that you are allowed to file a lawsuit at the same time as filing for bankruptcy. But you may need to notify and get the approval of the Kentucky bankruptcy court first. Plus, you may need to disclose the potential monetary award you might win should your legal action be successful, so that your bankruptcy trustee may account for it as a possible asset to use to pay off your outstanding creditors.
Speaking with a lawyer is never a bad idea, even if you are still unsure whether you require a bankruptcy declaration just yet. At the very least, they may serve as a shoulder to lean on and a listening ear to your current financial strife. So when in doubt, please schedule an initial consultation with a skilled Louisville, Kentucky consumer bankruptcy lawyer from Schwartz Bankruptcy Law Center today.
