Guidance When Facing A Creditor Lawsuit
Falling behind on a bill payment or two can happen to anyone. If you face a major crisis such as a job loss, a medical emergency or a divorce, financial issues can seem inevitable. At first, you may not worry too much, thinking you will get back on your feet. But when you start receiving threats of lawsuits, the reality of your situation can begin to feel overwhelming.
I am attorney Sean T. Flynn, and I have helped many clients in scenarios just like yours over the past decade. I founded The Law Offices of Sean T. Flynn PLLC in order to help everyday people facing extraordinary difficulties with debt. I approach each new client with compassion and apply an individual debt relief strategy to meet their specific needs.
Why Creditors Decide To Sue
Creditors bring lawsuits in an attempt to collect the money the debtor owes. Often, a creditor will sell your debt to a collection company that makes its living collecting debt. If the debtor does not appear in court, the creditor will win by default. If the creditor is successful, the court will issue a judgment against the debtor. This may allow the creditor to garnish wages or a bank account.
Can Bankruptcy Put A Stop To A Lawsuit?
If you decide to file for bankruptcy, your petition will trigger a stay — an automatic stop — to any debt collection actions against you. During a stay, creditors cannot raise a lawsuit, garnish your wages, or even harass you with letters or phone calls. It also puts any lawsuit they may have already been filed on hold.
I can help you decide whether bankruptcy is the right option for you. You may file for Chapter 7 bankruptcy, which liquidates many of your assets but wipes your slate clean of most debts. This is often a good option for people with few assets, but it has more difficult eligibility requirements. If you have assets you hope to protect, then Chapter 13 may be a better option for you. Filing under Chapter 13 allows you to restructure your debt in a long-term payment plan while still requiring you to pay back much of the money owed.