Feb 18, 2015

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Eliminate Lawsuits when You File for Bankruptcy

Debt can build up faster than most people realize, and there are many people who work hard to repay their bills but find themselves drowning under a sea of overpaid bills. When times get tough, some families have to choose between buying groceries for the month or paying down a couple of credit cards. The groceries always win out, which means creditors tack on a late fee to your next bill.

If you ignore future bills, soon you’ll find yourself the defendant in a collections lawsuit. With Utah chapter 13 bankruptcy, you may be able to avoid the lawsuits and figure out ways to repay some of your creditors without having to go to court. Not all debts are resolved through bankruptcy, so hiring an attorney is a good idea.

Lawsuits Stopped by Automatic Stay

Think of an automatic stay as a type of restraining order against creditors. The creditor may still attempt to collect, but the company will need court permission to proceed. This prevents most creditors from attempting collections or continuing with a lawsuit. As you work with your Utah chapter 13 bankruptcy attorney, you will have a better idea if the lawsuit will be eliminated completely or if you will still owe the money even after the resolution of the bankruptcy.

Bankruptcy May Not Eliminate All Litigation

Filing for bankruptcy is not a solution to eliminating all debts or all lawsuits. Only an experienced attorney can review your case and determine if the debts or litigation brought against you will be resolved through filing for bankruptcy. Utah chapter 13 bankruptcy often involves a repayment process and your attorney will determine if you’re better off trying to repay your debts or trying to get them eliminated.

Because filing for bankruptcy can affect your credit, you don’t want to file if your case won’t be resolved. In the event that your bankruptcy filing writes off your debts, you will no longer receive collection notices or threats of litigation from creditors. Your attorney can give you a list of all resolved debts and help you determine the next best step if you still have debts owed to people or companies.

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