Responding to a Creditor Lawsuit if Filing for Bankruptcy

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When filing for bankruptcy, it is important to receive letters and information from current creditors while refraining from an immediate response. During these processes, it is essential to have a professional such as a lawyer to assist with the matter and ensure that all creditors acquire the necessary response per the legal representative.

When a person has reached the limit of debt and has no or nearly zero disposable income, it is time for bankruptcy for him or her. Through a Chapter 7 he or she could eliminate all or most of these loans and borrowed funds. However, if some disposable income remains after all debts have money transferred, a Chapter 13 is necessary. During these processes, some creditors may attempt to sue the individual or pursue a claim against him or her. These issues need to pass to either the bankruptcy agent or a lawyer for handling. The bankruptcy process will usually halt all debtor claims until the procedure completes. This may remove the litigation and ensure the debts payments complete through another source.

Response to Lawsuit Claims

When debtors file a lawsuit against an individual, he or she may need to present himself or herself in the courtroom before a judge. However, when bankruptcy has already begun, these responses before the judge are not usually necessary. The initiation of a Chapter 7 or 13 starts the process to purge these debts in full or partially. The months or years it takes to complete the procedure usually stays any possible judgement and may remove the need for one entirely. The need for garnishment is also taken from the situation. Thus, a response may only explain to the debt collector that the matter is in hand and will either continue through a repayment plan or with a purging.

The Need to Respond

The specific circumstances of the individual will determine if there is a need to respond to the legal claim. When bankruptcy has already begun, any response may occur through a lawyer or bankruptcy agent. If the person has not taken part in the first steps to resolve the matter through bankruptcy, he or she may need to respond and present himself or herself before the judge. He or she may also have another refer him or her to a legal service or lawyer to assist with the matter. Then, the need to respond is more important when bankruptcy is not part of these processes.

Whether the applicant has started a Chapter 7 or 13, he or she should have legal representation to ensure there are not violations incurred during the process. This is equally important when facing possible lawsuits due to debts accrued. Some lenders may include a mortgage company that may attempt to auction the house through a foreclosure process. While the bankruptcy procedure may halt this temporarily, it is crucial that the homeowner attempts to contact the financial institution to remedy the problem. Through a lawyer, he or she may find protection from various creditors’ actions. The legal representative may provide the necessary response with information about the pending or current bankruptcy process.

The Effect of Bankruptcy on Creditor Lawsuits

Depending on the Chapter 7 or 13 filed during the application, the person may face paying some of these debts back or eliminating most or all of them entirely. Any current lawsuits handled at the time of the bankruptcy may ensure these issues are taken care of by the agent. However, it is still important in many instances to hire a lawyer to contact and inform debt collectors that the lawsuits will become moot or irrelevant. This may save time and money in addition to the energy the company may use to try for a wage garnishment. Any contact may ensure a better relationship with the creditor in the future.

When the person has not yet filed for bankruptcy, he or she may need to quickly initiate the process to prevent any additional actions causing him or her harm. This may lead to communication with the bankruptcy agency for a swift action to stop creditors from filing lawsuits or attempting other such actions. However, it is important to start these proceedings immediately.

Legal Communication in Bankruptcy

When the applicant has contact with a debt collector about outstanding payments and similar problems, he or she may need to hire a lawyer to ensure these matters reach resolution. This may protect him or her during bankruptcy and ensure a smoother process.


Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer.

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