What happens if I'm being sued for debt and I file for bankruptcy?

The immediate and one of the most important effects of filing bankruptcy is the automatic stay. The automatic stay prohibits your creditors from continuing any collection proceedings against you. Collection proceedings include lawsuits, foreclosure, repossessions or any other type of collection activity. The stay goes into effect the moment you file the petition with the bankruptcy court.

When filing your petition for bankruptcy, you need to make sure you list all creditors and give the court information about any suits against you. The bankruptcy clerk’s office will send notices to your creditors based on the information you provide.

The most important aspect of the bankruptcy petition, regardless of which chapter you file, is the discharge of your debts. This order from the courts means none of your creditors can legally take action against you for the debt you owe them. You have rights to take action against creditors who violate an order of discharge in bankruptcy.

Consult with an attorney experienced in bankruptcy law for help with the bankruptcy process or the petition.