Many of you who might be considering filing for a bankruptcy for the first time usually have a lot of questions. One common question is, “What effect does filing a bankruptcy have on a lawsuit or judgment?
Here are three different ways filing a bankruptcy might have an effect on a lawsuit or judgment:
- When you file bankruptcy plays a very important role on how a filing can effect a lawsuit, and in particular, a judgment from a lawsuit. When a judgment has been awarded a creditor in a successful lawsuit, that brings an arsenal of weapons creditors can use against you. If you live in a state that allows garnishments, the court awarded judgment can allow a creditor to petition the court to garnish your wages or bank accounts. Once a successful creditor has garnished one or the other of these assets from you, that portion of the asset is gone, and a bankruptcy court most likely cannot go back after those assets. So, timing is important in filing a bankruptcy to protect you against judgments.
- The type of bankruptcy filed can play a role in effecting a lawsuit or judgment against you. A judgment can result in a creditor attaching a lien on your assets that can provide a creditor with their original claim and interest when you try to sell the assets. In some cases, these liens can be stripped by certain bankruptcy filings.
- Repossessions can be stopped by bankruptcy in a variety of ways. A creditor can repossess your property without going to court if it can be done without a breach of the peace. That means a creditor cannot enter your home, garage, or enclosure of your property without permission, but they can repossess the property in question if the property is found in a public setting like your front yard or a public parking space. If you are there to object to the repossession, the creditor must take the matter to court.
If the creditor takes you to court and wins a judgment to repossess the property as agreed by contract, the only way you can stop the creditor at this point is to file for bankruptcy.
If you file a bankruptcy in a timely manner, you can stop certain lawsuits and judgments from having much of an effect on you, and you can possibly save your property in some circumstances.
The moment you file a bankruptcy, a judge will order all collecting actions to cease, an important feature called the automatic stay. The automatic stay, applicable to all types of bankruptcy filings, means that the mere request for bankruptcy protection automatically stops and brings to a cessation certain lawsuits, foreclosures, utility shut-offs, evictions, repossessions, garnishments, attachments, and debt collection harassment.
If you determine you are in need of relief from the stress associated with debt and you live in or around the metropolitan area of San Jose, California, contact us here today at www.betterbankruptcy.com .We will help you find a bankruptcy attorney in your area that will help you with any questions you may have on bankruptcy law.
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