What happens if someone won a lawsuit against you and you declare bankruptcy due to an inability to pay the judgment?
When you file for bankruptcy, most of your assets and liabilities will be wiped out. This includes lawsuits and collection actions. Even though you can still file a lawsuit, it can be much more difficult and expensive. Bankruptcy will also make it impossible to file a lawsuit for fraud or malicious injury.
If you are sued for a debt, the first thing to consider is whether you can fight the lawsuit. This will prevent the lawsuit from moving forward and will put a halt to it. The chances of winning are 50/50, but you can try to fight the lawsuit. However, this is very expensive and may not be a viable option if the lawsuit is valid.
Generally, if you lose a lawsuit, the state court will have jurisdiction over the underlying debt. However, if you have already been granted bankruptcy, the state court will likely allow the case to move forward. This is helpful for creditors, but you must understand that it is best for your financial future to avoid the risk of losing a lawsuit.
You must be aware that the creditor may try to collect on the judgment. Once the judgment is issued, it will act as a lien on your property. This lien will prevent you from selling the property if you don't pay the judgment.
If you have any questions or in need a Bankruptcy Attorney, we have the Best Attorneys in Utah. Please call this law firm for free consultation.
Ascent Law LLC
8833 S Redwood Road Suite C
West Jordan UT 84088
(801) 676-5506
