Bankruptcy Attorney: What if I am Sued in Bankruptcy?
Despite what many people think, a Chapter 7 or 13 bankruptcy is a pretty straightforward process once you have selected a bankruptcy attorney. Although the process may be stressful, with the right representation you will emerge on the other side with a new lease on your financial life. Sometimes the process can be complicated, however, if you are sued. Sometimes a creditor will choose to sue the debtor in bankruptcy court. Luckily, the first step you should take is choosing a bankruptcy attorney to not only help you file but represent your financial interests. Today, Groce & DeArmon will discuss what happens when you are sued by a creditor during your bankruptcy process.
Situations in Which Creditors May Sue
Sometimes a creditor will file a lawsuit because they don’t understand how bankruptcy works. This happens more often than you would guess. However, the automatic stay that comes with filing a bankruptcy is designed to prevent creditors from taking any collection activities outside of the bankruptcy court.
Another situation that can occur legally is an ‘adversary proceeding’. An adversary proceeding will have a plaintiff and defendant, like a normal court proceeding. In general, the debtor will be the defendant while the creditor will file a complaint that explains why they are entitled to relief from the bankruptcy court. In other words, they will attempt to prevent the debt that you owe from being discharged in bankruptcy.
What to Do if You Are Sued
First, remember not to panic. Just because you are being sued does not mean that you have done anything wrong. Anyone who wants to sue only needs to pay the clerk’s filing fee. Secondly, you have a bankruptcy attorney representing you for a reason. Choosing an experienced team like Groce & DeArmon will greatly increase the chances that the suit will be dismissed or overturned.
If a lawsuit is filed while you are filing bankruptcy, your attorney will want to file an ‘Answer’ or a ‘Motion to Dismiss’. After an Answer is filed, the next step is to appear in court for a status conference in which the judge will get a general understanding of the case and either dismiss or set deadlines and future hearings. It is during these periods that choosing an experienced bankruptcy attorney from Groce & DeArmon can make all the difference in your success.