Bankruptcy After and During a Lawsuit

July 22nd, 2020
Posted By
Michael Ryan Jones
gavel laying on hundred dollar bills
Lawsuit expenses continue to rise. Between attorney fees, filing charges, expert testimony, document copies, and more, what may result in a payout will first cost you big bucks. But when you were already in financial trouble, you may seek bankruptcy after a lawsuit. Whether you are the one pressing charges or being taken to court, there are some things you need to know about filing during or after a lawsuit.

Can I file for bankruptcy after a lawsuit?

It is more common than you may think that people will file bankruptcy when they have a pending lawsuit. This is because if a creditor has filed a lawsuit against you, the bankruptcy may put the automatic stay in place, giving you a chance to recoup losses and putting the lawsuit on pause. However, there are some lawsuits that will not be impacted by the automatic stay and will continue on, even if bankruptcy has been filed. Some lawsuits that continue regardless of bankruptcy include:
  • Criminal cases
  • Divorce and dissolution actions
  • Child custody and support cases
  • Code enforcement
  • Lawsuits you filed against someone else
However, in some cases, those involved in the lawsuit can petition the judge to allow the lawsuit to continue. In these cases, a judge will likely allow the case to proceed regardless of the bankruptcy filing if:
  • The outcome of the lawsuit won’t impact the bankruptcy case
  • The lawsuit will decide an issue that must be resolved in the bankruptcy case, like fraud, and waiting to determine the lawsuit would be costly
In addition, if you or your business are facing charges against a governmental agency for something such as a violation of regulations, which can be dangerous, these cases will also be likely to continue with or without court approval.

Why would I file bankruptcy during a lawsuit?

Many people will decide to file for bankruptcy when a lawsuit is filed against them for a financial matter. Though certain cases will continue, such as those mentioned above, once you have a plan in place to manage your debts, the lawsuit will likely not be as strenuous as it was before when so much was in upheaval. If you are in the middle of a lawsuit and are contemplating bankruptcy, contact the Ohio attorney, Michael Ryan Jones.

Filing for bankruptcy: The Jones Law Firm

Lawsuits and financial difficulties coupled together can be stressful. Let us help relieve some of the pressure of debts you cannot pay. If you are in the middle of a lawsuit, we encourage you to contact The Jones Law Firm for a free consultation about how we can help and whether Chapter 7 or Chapter 13 bankruptcy is right for you at this time. With offices in Reynoldsburg, Ohio, The Jones Law Firm works with clients in and around Columbus and throughout central Ohio.
Categories: General Bankruptcy