Being in the middle of a legal battle may be one of the most stressful situations to find yourself in. What’s worse, prolonged and drawn-out lawsuits are notorious for draining the bank accounts of all involved parties. This may make your already-crippling financial situation even worse. With this, you may not think it is the appropriate time to file for a bankruptcy case, even if you desperately need some financial relief right about now. Well, if this is your current predicament, please follow along to find out what happens to your pending lawsuits once you file for bankruptcy and how a proficient Rockland County bankruptcy attorney at The Law Offices of Allen A. Kolber, Esq., P.C. can help protect you from any further legal actions placed against you.
What happens to my pending lawsuits once I file for bankruptcy?
During bankruptcy, your pending lawsuit(s) may be handled differently depending on its classification. For one, say that your outstanding creditors pursue a money collection action against you. Well then, the New York State bankruptcy court may halt this legal action effective immediately, in large part thanks to the automatic stay that comes with your bankruptcy filing. Specifically, an automatic stay prohibits creditors from any collection activities, such as lawsuits, but also wage garnishments, collection calls and letters, bank restraints, foreclosures and repossessions, etc.
In another example, though, say that you are being pursued in a criminal law case, family law case, or fraud-related case. Any of these cases may remain unaffected by your bankruptcy filing and proceed as normal. Meaning, you may have to juggle this outstanding case with your current bankruptcy case simultaneously. However, the bright side to this is that bankruptcy may free up funds you desperately need to pay off the legal fees with your other case.
On the flip side, say that you are a plaintiff in any of these case types. With this, you may proceed as normal, so long as you account for the money potentially recoverable in the final judgment as an asset in your initial bankruptcy filing. This is to say that you may lose this monetary award during your bankruptcy proceedings. Still, you may find the financial relief granted at the conclusion of your bankruptcy case to offset this.
Can someone pursue a lawsuit against me once I file for bankruptcy?
Again, the type of lawsuit in question may affect whether it can be pursued during bankruptcy proceedings. Firstly, if a creditor wishes to continue a lawsuit against you, they must petition the New York State bankruptcy court for a relief from the stay. On the other hand, certain types of family law cases, particularly those handling child support and alimony payments, cannot be stopped by your bankruptcy’s automatic stay.
Speaking with an attorney is never a bad idea, even if you are still unsure whether you require a bankruptcy declaration just yet. At the very least, they may serve as a shoulder to lean on and a listening ear to your current financial strife. So when in doubt, please schedule an initial consultation with a talented Rockland County bankruptcy attorney from The Law Offices of Allen A. Kolber, Esq., P.C. today.
