If you have a lawsuit filed against you, it may be time to consider seeking bankruptcy protection. However, before you do so, it is important to confer with an experienced Chapter 7 or Chapter 13 attorney to verify that your filing will halt the litigation. Typically, the automatic stay halts lawsuits filed to collect a debt. Below are a few examples of court actions that are not stopped by your bankruptcy filing:
- Family law cases. If the lawsuit is regarding a family law issue such as child custody, alimony, child support or a paternity determination, the case usually proceeds even though you filed for bankruptcy.
- Criminal proceedings. You cannot stop a criminal action against you by filing a personal bankruptcy case. If the criminal matter involves a debt portion, that part of the case may be halted, but you can still be prosecuted for the crime.
- IRS proceedings. Audits, issuance of tax deficiency notices, demands for tax returns or issuance of tax assessments can be issued by the Internal Revenue Service (IRS) even while your bankruptcy case is pending. However, it is important to note that your bankruptcy will stop the IRS from issuing tax liens, seizing assets, and seizing your income.
Although not a legal proceeding, if you have funds being withheld from your paycheck in order to repay a loan from certain types of pensions, your bankruptcy filing will not stop these withholdings.
If you have lawsuits pending against you and you are considering filing a Chapter 7 or Chapter 13 bankruptcy, contact us to learn how the automatic stay will impact you.
If you are considering filing a bankruptcy and you need help determining which type of filing would be best for you, contact Fitzgerald & Campbell to schedule an appointment. We do not offer just one debt relief option, we don’t push you in one direction. If bankruptcy right for you, we will tell you. If it’s not, we will tell you that. If bankruptcy is your get-out-of-debt plan, it needs to be done right. It needs to be in the hands of experienced lawyers who have been there before. Contact us today!