I got sued by a debt collector. Can I still file for bankruptcy?

Written by: leonora  |  Published on: February 28th, 2012  |  Category: Bankruptcy, Bankruptcy Basics, Debt

What if they filed a lawsuit against me, can I still file for bankruptcy and get rid of this debt? I hear this question a lot. The answer is yes, but I understand how having a lawsuit filed against you can be both stressful and confusing.

Lawsuit filed against you

Usually the original creditor (like American Express Centurion Bank) or a debt collector will file a lawsuit. You will know that a lawsuit was filed against you when you get a pretty hefty set of documents. The first page is likely to say “Summons” and the second page will be the beginning of the “Complaint.”

The Complaint will have allegations of your “wrong-doings.” When you don’t deal with these types of documents every day, they can be daunting. My guess is that you don’t see these often in the same way that I don’t see medical x-rays very often. As such, the Complaint may seem very intimidating. It is likely that the Complaint from your creditor will allege the following “wrong-doings”:

- Breach of contract,
- book account,
- quantum meruit-reasonable value.

This is all a roundabout way of saying, “hey, you borrowed money from us and didn’t pay back as agreed.” If that’s all your Complaint alleges then you are in the clear and can file for bankruptcy to discharge the debt. 99% of the time that will be the case.

Complications may arise when there is an allegation of fraud, but that is rarely the case and we won’t address that issue here. However, you should contact an experienced attorney in your area immediately to help you file an Answer if there is an allegation of fraud.

Filing for bankruptcy after a lawsuit

When you decide to file for bankruptcy, the lawsuit against you will stop and will be dismissed upon conclusion of your bankruptcy. Your bankruptcy attorney will handle this additional wrinkle in your bankruptcy case by taking the following additional steps:

1. List your lawsuit on Statement of Financial Affairs.
2. List the attorneys that filed the lawsuit as a party to receive additional notice on Schedule F.
3. File a Notice of Automatic Stay with the Superior Court where the Complaint was filed against you.

An experienced bankruptcy attorney will be able to help you quickly resolve the collection lawsuit in bankruptcy.

Feel free to contact us at (310)481-5098 to help you deal with your lawsuit.

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