If you have lost a lawsuit in Watertown, NY, and are facing potential financial repercussions, you may be wondering if you can file for bankruptcy after a lawsuit. Understanding how bankruptcy and lawsuits work is very important as this can help you better understand what your options are so that you can better protect your finances.
At Grady BK, PLLC, our goal is to equip our Watertown, NY, clients with the resources they need as they navigate the process of a bankruptcy lawsuit. We understand how overwhelming this process can feel, which can make it challenging to understand what the best option is for your situation. In this article, we will discuss if you can file for bankruptcy if someone sues you and how you can use bankruptcy to reduce collection activities. For further assistance with your bankruptcy case, call our office today to speak with a compassionate bankruptcy attorney.
Can You File Bankruptcy After a Lawsuit in Watertown, NY?
You may be seeking bankruptcy protection from a lawsuit if someone sued you, you lost the lawsuit, and you ended up with financial lawsuit judgments. It is quite common for creditors to file lawsuits against people who may have unpaid debts such as personal loans, medical bills, or credit card debt. If that is the case, this can make an already difficult financial situation even more complicated.
If you lose a lawsuit, the court will most likely order you to pay the debt you owe, with interest, as well as other lawsuit-associated costs, such as filing fees and legal fees. To ensure these debts are paid off, your creditors may be allowed to garnish your wages, freeze bank accounts, put liens on your house, as well as seize assets to pay off your debts.
A very accessible way of receiving protection from these financial repercussions is by filing a bankruptcy petition. When you file a bankruptcy petition, the bankruptcy court initiates an automatic stay, which prohibits creditors from making any collection efforts. For instance, creditors won’t be able to contact you through your phone number about your debt or proceed with other actions such as foreclosure, eviction, wage garnishment, or repossession.
Dischargeable Vs. Non-Dischargeable Debts
If you are wondering if you can file for bankruptcy after a lawsuit, you need to understand the types of court judgments you have received and the types of debt you owe. When it comes to bankruptcy, there is dischargeable debt and non-dischargeable debt.
Dischargeable debt can be wiped away when you file for bankruptcy, which means that you will not have to pay it off. However, non-dischargeable debt is not wiped away by bankruptcy, which usually requires you to create a repayment plan to pay them.
Here are the types of non-dischargeable debt bankruptcy will not be able to help with:
- Criminal fines or restitution
- Drunk driving-related debt
- Student loans
- Child support
- Alimony or spousal support
If you are unsure about whether you have dischargeable or non-dischargeable debt, you need to hire a bankruptcy attorney in Watertown, NY. An experienced attorney will be able to help you navigate what your options are and help you understand the differences between a bankruptcy Chapter 7 lawsuit and a bankruptcy Chapter 13 lawsuit.
Filing Bankruptcy to Avoid Lawsuit
Now that you know about your options when it comes to bankruptcy after losing a lawsuit, can you file for bankruptcy to avoid a lawsuit? The good news is that you can file for bankruptcy as a way of stopping a lawsuit from going through to avoid financial repercussions. This may not always be a permanent solution, but it can halt or temporarily delay a civil lawsuit.
The types of civil lawsuits that can be halted by filing for bankruptcy include:
- Landlord/tenant disputes
- Home foreclosure
- Debt collection lawsuits
- Personal injury claims
- Contract disputes
- Deficiency balance collection
- Evictions
- Business partner financial disputes
On the other hand, there are certain types of civil lawsuits that bankruptcy usually cannot stop, such as criminal, divorce, alimony, and child custody cases. Bankruptcy may also not be able to stop eviction lawsuits if the court has already granted possession to your landlord.
When you file a bankruptcy petition, an automatic stay will take effect, protecting you from any collection efforts. Creditors may try to bypass the automatic stay by petitioning the court or filing a motion for relief from the automatic stay. However, the creditor would have to present a strong case to have the automatic stay lifted.
Filing for bankruptcy before the final judgment of a lawsuit can protect you from certain complications, such as liens or non-dischargeable judgments. You should seek the assistance of a bankruptcy attorney to help you better understand whether Chapter 7 or Chapter 13 bankruptcy is the better fit for your situation.
Watertown, NY’s Top Compassionate Bankruptcy Attorney
Navigating whether or not you can file for bankruptcy after a lawsuit can be a complex process, which is why it is always advisable to seek guidance from a professional. At Grady BK, PLLC, we will help you throughout the entire bankruptcy process, including understanding the complexities around a lawsuit and Chapter 7 or Chapter 13 bankruptcy. Having a bankruptcy attorney in Watertown, New York, on your side will ensure you choose the best option for your situation and feel confident throughout the bankruptcy process.
At Grady BK, PLLC, we understand the complex challenges our clients face during the bankruptcy process in New York, which is why our focus is on providing personalized assistance every step of the way. We are here to answer all of your questions so that you feel confident proceeding with your bankruptcy lawsuit settlement.
Contact us today at 315-299-9005 discuss your financial situation with a bankruptcy attorney. Our team at Grady BK, PLLC, is ready to provide you with the legal assistance you need, whether you choose to file for Chapter 7 or Chapter 13 bankruptcy.