What Do I DO If A Creditor Sues Me For A Debt- Can I Include This In The Bankruptcy?

Yes, certainly you can include a debt in the bankruptcy even if the creditor sues you as long as the debt is dischargeable.  (Check back for a later blog to see which debts are dischargeable).  If you are served with a lawsuit by a creditor then you have 30 days to answer that suit.  You can answer with a bankruptcy filing but if you are not ready to file within 30 days then you can answer the suit to set it for trial.  Trial will be some months away and you can still file before the trial.

Once you get a lawsuit though remember the clock is ticking so don’t delay.  Call a bankruptcy attorney right away so he is notified and can advise you.  If you fail to file the bankruptcy or answer the Summons and Complaint within the 30 days then you will eventually be defaulted by the attorney for the creditor.

A default means that now the creditor will enter a default judgment against you and they can file a lien against your credit, they can lien your house, they can garnish your wages, and they can attach your bank accounts.  You don’t want any of these things as they are all bad.  The creditor can pursue all of these tactics once he gets this judgment.  Act quickly and don’t allow him to get your money or your assets.

Many of my clients have been called into their bosses office one day to be told there is a wage garnishment being deducted from their paycheck that they must now pay.  Others have discovered the money in their bank accounts seized.  Sometimes liens are put on their houses which are very hard to remove.  Don’t let this happen to you!  Call me or another bankruptcy attorney immediately upon receiving a lawsuit for an unpaid bill.

Don’t confuse the Summons and Complaint with a letter form a lawyer threatening to sue though.  One is clearly marked as a court document giving you 30 days to answer.  Please call if you have any confusion.

If you file the bankruptcy then the bankruptcy stay comes over all of your creditors blocking them from collecting debts from you in any way.  Bankruptcy law is federal law and it preempts or overrides state law so the court in which you were sued would have to dismiss the suit.  The creditor and his lawyer will be notified in the bankruptcy schedules so they will not be able to pursue a judgment against you.

So bankruptcy is your answer and your way out if you are served with a lawsuit by a creditor to whom you owe a dischargeable debt.

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