How to File Bankruptcy With a Lawsuit Pending
If you fall behind in your payments on credit cards or other loans, you may be the subject of a lawsuit initiated by the creditor. For many debtors who are contemplating bankruptcy, receiving a summons for a lawsuit can be the final push toward filing for bankruptcy protection. While a lawsuit may eventually lead to a judgment that garnishes your wages and seizes your assets, filing for bankruptcy initiates an "automatic stay" that prevents your creditors from pursuing collection activities until the resolution of your bankruptcy. If you receive a bankruptcy discharge, you will no longer be responsible for the debt that initiated the lawsuit.
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Instructions
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Note the date of your court hearing. This date must be printed in the summons announcing the lawsuit against you. While you can file bankruptcy after this date, you will have to return to court to have the judgment against you vacated. The faster and easier process is to file for bankruptcy before your court date and stop the lawsuit in its tracks.
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File an emergency bankruptcy petition. If the court date for your lawsuit is in the near future, you can file a bare-bones bankruptcy petition in order to initiate the automatic stay and stop the lawsuit from proceeding. If you elect this course of action, you must file the remainder of your bankruptcy petition within 15 days or your case will be dismissed.
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Notify the creditor that you filed for bankruptcy. Although the court will mail out notices of your bankruptcy to all creditors you list in your petition, sending your own notice directly to the creditor is usually faster. To be certain that your creditor has received notice of your petition, send it via certified or registered mail with a return receipt requested.
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Notify the attorney responsible for filing the lawsuit. Once the attorney receives notice of your bankruptcy filing, it is illegal for him to continue to pursue the lawsuit according to the provisions of the automatic stay. As with your actual creditor, send notice of your petition via certified or registered mail with a return receipt requested.
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Mail a copy of your bankruptcy petition to the court in which the lawsuit was filed. While the plaintiff's attorney should stop collection activities and notify the court of your petition, this step ensures that the court will not proceed with the lawsuit until your bankruptcy case is resolved.
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