A lawsuit that has already been filed does not always have to keep moving forward once a bankruptcy case begins. This post covers what happens when a lawsuit has been filed but no judgment has been entered. It also covers what happens when a judgment has been entered but collection actions have not yet been taken.
Frequently Asked Questions
Can bankruptcy stop a lawsuit that’s already been filed against me?
If you have already had a lawsuit filed against you, a bankruptcy will still prevent the lawsuit from moving forward. If the lawsuit has been filed but no judgment has been entered, the filing of the bankruptcy will stay the underlying state court proceeding and prevent them from being able to pursue a judgment.
Now, if a judgment has already been entered against you, the bankruptcy can still advantage you because it stops the collection activity that comes after a judgment is entered. That is, namely, wage garnishments, frozen bank accounts, and putting liens on your property. Bankruptcy will prevent those things from happening if a judgment has already been entered but those actions have not already been taken.
Are you struggling financially? Pratt & Maegli Law Firm in Rockford helps Illinois families and individuals explore Chapter 7 and Chapter 13 options with clear answers and a personal approach. Call (815) 315-0683 or visit rockfordbankruptcytoday.com to schedule a confidential consultation and take the first step toward real financial relief.