Can Your Creditors Still Sue You After Bankruptcy?
Can your creditors still sue you after bankruptcy?
Can your creditors still sue you after bankruptcy? Yes, they can—but they won't.
This seems to be one of those questions that causes a lot of confusion and fear, so let's start with the basics. When you file for Chapter 7 bankruptcy, the court automatically protects you from most collection actions by your creditors. However, there are a few categories of collection actions that do not get stopped by bankruptcy.
The first category is where the creditor has a valid state court judgment against you (meaning it's not related to an unpaid debt). Creditors with valid judgments against you can still take actions to enforce the judgment after bankruptcy, such as garnishing your wages.
The second category is where the creditor has a written agreement to take specific actions against you in order to collect on the debt after bankruptcy. This usually occurs in situations where a creditor is owed money for something other than a credit card or loan payment, such as an unpaid medical bill. Again, these creditors can enforce their rights even after bankruptcy.
The third category is where the creditor successfully files a lawsuit against you prior to your filing for bankruptcy. These lawsuits may arise out of debts that are discharged in bankruptcy or debts that can continue to be enforced even after bankruptcy.
If you have any questions or need a Bankruptcy Lawyer, please call this law firm for a free consultation.
Ascent Law LLC
8833 S Redwood Road Suite C
West Jordan UT 84088
(801) 676-5506
