does filing bankruptcy stop a lawsuit

What happens to a credit card lawsuit if I file bankruptcy?

You may be considering filing for bankruptcy if you were served with a credit card lawsuit. If so, you definitely want to know what happens to a credit card lawsuit if I file bankruptcy?

The Automatic Stay

Immediately after filing bankruptcy the Federal Automatic Stay is invoked (unless you aren’t eligible for it due to too many recent bankruptcy filings). But what exactly is the Federal Automatic Stay? The automatic stay prevents your creditors from any further collection efforts. It takes place the second that you file for bankruptcy. However, your creditors may not receive actual notice that you have filed for approximately a week after you file via mail.

So since your creditors are prevented from future collection efforts that means they can no longer proceed with the lawsuit. However, some creditors may not dismiss your lawsuit until you have received your bankruptcy discharge.

Stopping the lawsuit in state court (or Federal court)

Once your attorney has filed your bankruptcy, they should immediately notify the state or federal court and the creditors attorney that you have filed for bankruptcy so that the lawsuit is stopped while the bankruptcy is pending. We take care of this for our clients, however you may need to do this on your own if you file your bankruptcy pro-se or use some other attorneys that may charge you an extra fee to do the required paperwork.

Once your discharge is official, the creditor should dismiss the lawsuit against you because your debts have been discharged in the bankruptcy.

For those who prefer a video:

We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.

If you are considering filing bankruptcy in California or Nevada we’d love to talk with you regarding your legal situation. Feel free to contact us to schedule your bankruptcy consultation.

This blog is for general entertainment purposes and should not be used as legal advice. Please talk to an attorney regarding your particular situation.

Leave a Comment

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Translate »
Scroll to Top