When Bankruptcy and Lawsuits Overlap: What Happens in Court?

Have you ever wondered what happens when money problems end up in court? Imagine spending years fighting a legal battle, only for one filing to change everything. What if someone in the case suddenly files for bankruptcy? Could that stop the lawsuit in its tracks?

Many financial disputes become complicated when bankruptcy gets involved. In fact, nearly half of all bankruptcy cases bring unexpected legal challenges. At Biggs Law Firm, PLLC, we understand how tricky these situations can be. We’re here to help you get through civil litigation in bankruptcy with the best possible outcome.

How Bankruptcy and Lawsuits Connect

Bankruptcy and lawsuits might seem like two completely different legal issues, but they can affect each other in big ways. When someone in a lawsuit files for bankruptcy, it can change the entire case. This can create stress for both the person who owes money (the debtor) and the person trying to collect it (the creditor).

A decision made in one case can impact the other, leading to surprises that neither side expected. If you’re dealing with bankruptcy, it’s important to know how it might affect your financial future.

How Bankruptcy Changes a Lawsuit

Filing for bankruptcy can completely change an ongoing lawsuit. It can:

• Put a stop to legal actions.
• Change how creditors and debtors work through the case.
• Force both sides to adjust their legal strategies.

If someone’s financial situation suddenly changes, it can shake up the whole case. This is why it’s important to know your rights and be ready to adjust your approach.

What Happens If Bankruptcy Is Filed During a Lawsuit?

Imagine a lawsuit is in progress when one of the people involved files for bankruptcy. This can:

• Pause the legal process.
• Stop judgments from being enforced.
• Make everyone rethink their next steps.

Bankruptcy Courts  put an “automatic stay” in place, meaning the lawsuit can’t move forward without permission from the Bankruptcy Court.  This pause gives everyone time to figure out what happens next and adjust their legal strategies. Some lawsuits may end up being resolved by the Bankruptcy Court instead of where they were originally filed.

Finding Your Way Through a Complicated Situation

If you’re dealing with both bankruptcy and a lawsuit at the same time, being prepared is key. A decision in one area could change the outcome of the other, affecting your finances and legal rights.

These situations require careful planning and flexibility. If you want to learn more about handling financial disputes, our team at Biggs Law Firm, PLLC, can offer guidance.

How We Can Help

At Biggs Law Firm, PLLC, we know how difficult it can be when bankruptcy and lawsuits collide. We have experience handling financial disputes and can help you understand every step of the process.

We take the time to listen to your concerns and find solutions that work for your situation. Let us help you navigate this legal challenge so you can move forward with confidence.