If you have been sued by a creditor in order to collect a debt, you may feel overwhelmed or out of options, but you have a path to recovery. Consider filing for bankruptcy and contact an experienced bankruptcy attorney as soon as possible.
At the beginning of bankruptcy, you will be granted an “automatic stay” which will halt the creditor’s lawsuit proceedings and any other debt collection efforts. At the end of bankruptcy (if the court does not lift the stay during bankruptcy due to a valid reason from the creditor), any debt that was not paid via liquidation or reorganization may be discharged. However, it’s important to keep in mind the multiple exceptions to a discharge, such as tax debt, child support/alimony, and most student loan debt. Creditors may also apply for an exemption for debt which was procured by fraud, meaning that this debt won’t be part of your discharge and the creditor may continue its lawsuit or collection efforts beyond bankruptcy.
If a lawsuit has been filed against you to collect debt, schedule a free consultation with a bankruptcy attorney to evaluate your situation and discuss your options.