If you are facing any lawsuits or court judgments, you may be wondering how Ohio bankruptcy can help. Both lawsuits and judgments can have serious financial implications, which is why you will need to understand how bankruptcy impacts the outcomes for both scenarios.
Are you worried about judgments or lawsuits and how bankruptcy in Ohio handles this? If so, check out this article, where we will be discussing what a bankruptcy automatic stay is and how it can protect you from certain collection efforts.
The Automatic Stay: What It Does
No matter what type of bankruptcy you file for, you get the benefit of an automatic stay. The automatic stay is something that takes effect immediately once you file for bankruptcy, protecting you from collection efforts. If your creditors attempt to collect on your debt despite the automatic stay, you have the right to sue them.
The automatic stay protects you from things like a vehicle repossession, home eviction, foreclosure, or wage garnishment. If you have any pending lawsuits or ongoing litigation, the court will halt these processes until it can review and approve them.
If you have any civil lawsuits, filing for bankruptcy will most likely temporarily or permanently resolve this. However, keep in mind that there are always exceptions, so some lawsuits may not be put on hold by the automatic stay. When this is the case, the judgment or lawsuit will go back into effect after being reviewed by the court.
Types of Lawsuits Affected by Bankruptcy
Bankruptcy affects most civil lawsuits by initiating the automatic stay, essentially putting a pause on the lawsuit. And the good news is that most Ohio residents are facing a type of civil lawsuit that bankruptcy can help with, including:
- Credit card debts
- Home foreclosure
- Medical debts
- Personal loan debts
- Utility debts
- Business partner financial disputes
- Breach of contract with lender debt
- Debt collection agency accounts
In many cases, filing for bankruptcy can even help to eliminate lawsuits and any associated debts. For example, credit card and medical debt lawsuits are often dischargeable during bankruptcy proceedings. While repossessions, evictions, and home foreclosures are usually paused by the automatic day, but they may resume later on.
There are some other types of civil lawsuits that remain as your financial obligation, despite bankruptcy. This includes things like criminal cases, child support cases, and divorce or alimony cases.
Judgments Before Bankruptcy
Even if you already have a court judgment, bankruptcy may be able to help you with this. Some judgments are dischargeable as long as they qualify as dischargeable debt. If the judgment stems from non-dischargeable debt, bankruptcy will most likely not have any impact on this. For example, judgments related to fraud, support orders, or DUI-related injuries aren’t dischargeable.
Also, keep in mind that you still have the option of filing for bankruptcy if you have lost a civil lawsuit, resulting in a court judgment.
To better understand what your options are if you have judgments or lawsuits against you, you need to hire a bankruptcy attorney. An attorney will know what your options are and can help you understand whether or not discharging a court judgment in Ohio is a possibility.
Can You Reverse or Remove a Judgment?
The process of reversing or removing a court judgment in Ohio is very complex and dependent on the situation. Whether or not this is possible often depends on the timing and whether the debt is dischargeable or non-dischargeable.
Another option you may have is to file a motion to avoid judicial lien, which requests that an involuntary judgment lien on your home or property be removed. A bankruptcy attorney can help you better understand what this process entails and if it applies to your situation.
What Happens If You’re Sued After Filing for Bankruptcy?
It isn’t entirely uncommon for people to be sued by creditors after they have filed for bankruptcy. This can happen if the creditor asks the bankruptcy judge to lift the automatic stay. But the judge won’t lift the automatic stay unless the creditor has a good reason for requesting this.
Also, you may face a lawsuit after filing for bankruptcy if it applies to non-dischargeable debts not protected by the automatic stay. This could include child custody, criminal, divorce, child support, or spousal support lawsuits.
If you have any non-dischargeable debts when you file for bankruptcy, you will need to create a plan for managing them so that you can avoid facing a lawsuit. In many cases, you may be able to negotiate with your creditors on a payment plan that is manageable for your financial situation, with the help of an attorney.
FAQ Section
Will bankruptcy stop a lawsuit in progress?
Yes, bankruptcy will at least temporarily stop a lawsuit from progressing until the court has reviewed it. Some lawsuits are stopped entirely after filing for bankruptcy, while others may continue after being assessed by the court.
What happens to money that was already garnished?
You may be able to recover some of the wages that were garnished as long as they were taken 90 days before you begin the process of filing for bankruptcy. You also must be able to prove that there is an exemption that entitles you to receiving a refund. Depending on the circumstances and the amount of wages garnished, you may not receive all of the wages that you lost.
Can I remove a judgment from my credit report?
The only real way to remove a court judgment from your credit report is to pay it in full or negotiate a settlement amount with the creditor. Make sure that the agreement you have with the creditor includes the removal of the judgment from your credit report once the balance is paid.
Hire a Bankruptcy Attorney in Ohio
Whether you have court judgments or lawsuits on your record, bankruptcy can help you address these issues. Richard P. Arthur, Attorney at Law, has extensive experience handling bankruptcy cases in Ohio and can help you understand how lawsuits or judgments impact your bankruptcy case. To proceed with your case, contact us today at 937-254-3738 for a free consultation.