When Creditors Sue You

I truly enjoyed my time as a bankruptcy paralegal; and one of the reasons is that I was able to tell clients that by the time their bankruptcy was over they would be starting a new life not only financially, but emotionally as well. When debt starts to pile up it typically leads to other issues like creditor phone calls, letters, and sometimes civil lawsuits. These civil lawsuits originate when a creditor (like a credit card company) decides to summon you to court in order to ask the judge for a judgement against you that would ultimately require you to pay the debt. So how does filing bankruptcy work when creditors sue you? Here’s an outline of what a typical timeline would look like if your creditor sues you in the midst of your bankruptcy:

1. You receive a summons

In most cases lawsuits start with a summons delivered to the defendant stating that the date and time they are to appear in court. A summons will also list who is suing your and for what reason.

2. You contact your attorney

If you have already hired a bankruptcy lawyer then you should contact them immediately and let them that you have received the summons. Be sure to tell them who the summons is from because their response will differ depending on if it is a secured or unsecured creditor.

3. You appear in court

Unless your bankruptcy case is filed before the court date listed on the summons you should make plans to appear. Because this is a civil lawsuit and separate from your personal bankruptcy, your attorney may or may not appear with you, but that is nothing to worry about. If you miss this court appearance it is typical for the judge to award a judgement to the creditor who is suing you.

4. Your request more time

In most cases you can ask the judge for a continuance when you appear at the hearing. It is typical but not guaranteed for you to be granted a single continuance. A continuance will give you and your bankruptcy attorney more time to get your case filed and avoid the next hearing altogether.

5. You finalize your bankruptcy

Whether or not a judgement is put against you after the hearing you and your attorney will want to file your Chapter 7 or Chapter 13 bankruptcy as soon as possible to avoid possible garnishments or other civil lawsuits. Keeping your financial paperwork organized and keeping in contact with your bankruptcy lawyer is key to a speedy filing.

It is extremely common for debtors to be sued by their creditors during the preliminary bankruptcy process. Creditors have a right to take you to court for debt and they take that right seriously. Just remember that by choosing to file bankruptcy you are already one step ahead of your creditors and the law is on your side. And again, by the time your bankruptcy is over you will be debt free and the creditor stress will be over.

Comments are closed.