Can Bankruptcy Stop A Lawsuit?

Can Bankruptcy Stop A Lawsuit?

The attorneys at the Morrison Law Group can help any Utah resident deal with judgment creditors, especially by helping them file bankruptcy. A bankruptcy case filing will immediately stop a collection lawsuit and discharge the underlying debt of the civil lawsuit. Bankruptcy will stop all efforts of a judgment creditor to execute and collect on its judgment.

While bankruptcy can help anyone get a financial fresh start, it can protect bankruptcy debtors from creditors and their collection efforts, including lawsuits. At a free consultation with a Morrison Law Group attorney, we will review your financial circumstances and determine whether bankruptcy is the best alternative. If so, we will then determine which chapter has the most advantages and whether you qualify.

Depending on an individual’s circumstances, bankruptcy can eliminate debts through liquidation of assets in a Chapter 7 case, which typically results in many no-asset cases where debtors lose nothing, or through a reorganization in a Chapter 13 case where creditors are typically repaid a reduced amount over time. and most, if not all, property is retained. Filing bankruptcy stops annoying debt collection efforts, even after the creditor has already filed a lawsuit.

After a bankruptcy case is filed, whether under Chapter 7 or Chapter 13, a mechanism will automatically go into effect that functions as a cease and desist order. Known as the automatic stay, it prevents creditors, collections agencies, and other entities from engaging in or commencing any collection efforts. All phone calls, correspondence, and legal action must stop.

After a bankruptcy case is filed, no creditor may continue proceeding in or initiate legal action against a bankruptcy debtor. Also, if a creditor has already obtained a judgment, it may take no action to collect on the judgment without bankruptcy court approval. Bankruptcy attorneys work hard to legally prevent the stay from being lifted by creditors who wish to continue debt collection efforts.

Contact us online today for a free consultation about the effect of bankruptcy on lawsuits. The amount of the judgment may be substantial and it may not be the only unpaid debt subject of a civil lawsuit to enforce collection. Thus, bankruptcy may be an effective, cost-efficient option.

The Morrison Law Group has helped 8,000 people file bankruptcy and gain a fresh start. We’ve helped over 20,000 Utah residents deal with all types of financial difficulties caused by various severe and tragic events. Talk to us today about your Chapter 7 or Chapter 13 bankruptcy options. Call 801.456.9933 to schedule a FREE consultation. We have locations in Ogden, Logan, Sandy, and St. George to serve the residents of the counties of Weber, Cache, Salt Lake, Utah, Morgan, Davis, Washington, and surrounding areas.

 

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