Bankruptcy & Lawsuits

The Law Offices of Damian M. Nolan can help
you with your  Chapter 7 bankruptcy filing.
Call our offices at (562) 634-1115 today!

If you’ve recently been threatened with a lawsuit or someone has already filed suit against you, you may be considering bankruptcy protection. Most people have many questions when someone files suit against them. Many of those questions are general to the lawsuit, such as:

Should you answer the complaint?

What happens if the other party gets a judgment against you?

What happens if you ignore the lawsuit?

Some questions are specific to bankruptcy, such as: Can bankruptcy stop a garnishment for the judgment?

If the complaint goes unanswered, the court presumes that you agree with it. In most cases, you should answer the complaint. Doing nothing means that the court will, more than likely, award the plaintiff what he or she asks for or prove damages. Not answering the complaint most likely means that you won’t be a participant in the hearing. If the plaintiff wins a judgment against you, he or she can get a lien against your assets to recover damages, garnish your wages, or levy your bank accounts. Negotiating payments may be possible in some cases.

A bankruptcy petition shouldn’t be based on the timeline of the lawsuit, as weeks or months can pass between you being served notice of a lawsuit and the plaintiff getting a judgment against you.

In a bankruptcy, the judgment will probably be dischargeable, regardless. If, however, the judgment is attached to some asset, the only way to avoid it is if the attachment to the asset impairs an exemption in bankruptcy. If you have a judgment against you and your wages are being garnished, a bankruptcy filing will stop the garnishments on any income earned after the date of the bankruptcy filing. The only judgment against you that cannot and will not be discharged are orders for support.