Yes, filing for bankruptcy stops collection lawsuits. Whether you file a Chapter 13 bankruptcy or a Chapter 7 bankruptcy with us, our San Jose bankruptcy attorneys will ensure that any creditors who may be suing you to collect old debt notify the state court that their debt collection lawsuit must stop.
The first protection that you receive when you file for bankruptcy protection is the Automatic Stay of bankruptcy. This immediate protection is how bankruptcy stops collection lawsuits and requires that nearly all types of collection activities—including lawsuits filed against you by debt collectors—must stop immediately, pending the outcome of your bankruptcy case.
This protection is a huge relief to our bankruptcy clients, who often come to us after having been served with a summons and complaint filed in Santa Clara County Superior Court by some debt buyer suing them on old credit card debt or medical debt. Our bankruptcy clients are understandably terrified at being sued because they know what happens next … wage garnishment and bank levies. The good news is that bankruptcy stops these as well. In many cases, we can even recover for you wages that were already garnished during the 90 day period prior to filing your bankruptcy case.
Yes, filing bankruptcy stops collection lawsuits, but it does more. Filing Chapter 7 or Chapter 13 bankruptcy also stops creditors from collecting after they have already obtained a default judgment in one of these collection lawsuits in state court. And if a creditor refuses to recognize the protections that bankruptcy gives you, we can force them to do so by seeking an order from the Bankruptcy Court.
Have you been sued by one of these collectors, debt buyers, or collection law firms for old debt? We can help stop them if you file for bankruptcy protection. Just contact our San Jose Bankruptcy attorneys today for a free consultation.
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