Debt / Filing Bankruptcy

If I Am Being Sued by a Creditor Can Bankruptcy Get Rid of the Lawsuit?

Getting rid of a lawsuit in bankruptcy depends on a few factors.  One of the main factors includes determining if the liability associated with it is dischargeable.  Sometimes a debtor may receive a lawsuit or learn of being sued and ignore it.  This can turn into a default judgment giving creditors an upper hand on taking more legal action against you, such as a lien or wage garnishment.

In understanding whether the lawsuit can be discharged, you need to get clarity on the type of debt liability attached to the suit.  There are certain debts in which you may be responsible for paying if it doesn’t qualify for a bankruptcy discharge:

  • Debt related to outstanding student loans.

  • Debt obligations related to alimony/spousal or child support.

  • Debt owed to a government entity (taxes, restitution, or fines)

  • Debt related to DUI that resulted in injury or death.

These are just a few basic case scenarios in which you may not be eligible to wipe out a lawsuit.  If fraud or malicious acts are associated with the lawsuit this could also hinder chances of a discharge.  On a positive note, you may be able to avoid having a lien placed on your property if you begin the filing process soon and quickly.  In some cases, you may be able to remove a lien or provide protection for property through bankruptcy exemptions.  Discuss questions and concerns with an experienced bankruptcy expert.

Reference: http://www.nolo.com/legal-encyclopedia/will-bankruptcy-get-rid-lawsuit-judgments.html