Stop Collection Lawsuits Today!
September 26th, 2016
Many of our clients ask us what happens to lawsuits that are filed against them by creditors when a bankruptcy case is filed. The good news is that a bankruptcy will stop a collection lawsuit in its tracks as soon as the bankruptcy case is filed, regardless of how far along the lawsuit is. This means that a creditor can no longer take any further action to collect on the debt associated with the lawsuit when a bankruptcy petition has been filed. The bankruptcy does not erase the lawsuit from your credit history. This means that if you have been sued, the bankruptcy will not make the act of being sued disappear. However, the bankruptcy will limit the effect of the lawsuit on you. If a creditor has already obtained a judgment against you, it's not too late. You can still file a bankruptcy to keep the creditor from going any further to collect on this judgment. Creditors can collect through garnishment of wages, attachment of bank accounts and recording a lien against your real estate. If a lien has already been recorded, in many situations we can seek to have the judgment removed from your real estate if it does not attach to any equity (i.e. the property is under water) or if it impairs your homestead exemption, which in Ohio is $136,925.00 per filing debtor. If you have been served with a lawsuit or think that you may be sued by a creditor soon, please contact our office to schedule a free first appointment.