What Happens to Lawsuits and Judgments When You File for Bankruptcy in Texas
Bankruptcy in Texas—A Legal Reset or a Complicated Maze?
Filing for bankruptcy in Texas can feel overwhelming, especially when lawsuits and court judgments are involved. If you’re facing financial hardship and legal action from creditors, you may wonder: Will bankruptcy stop a lawsuit? Can I eliminate a judgment? What legal protections do I have?
The good news is that bankruptcy offers relief, but the extent of that relief depends on the type of debt, the lawsuit’s status, and the type of bankruptcy you file. This blog breaks down how bankruptcy impacts lawsuits and judgments in Texas, answering common questions and helping you make informed decisions.
How Does Filing for Bankruptcy Affect Lawsuits in Texas?
One of the most powerful legal protections bankruptcy offers is the automatic stay—a court order that halts most legal proceedings the moment you file. This includes lawsuits from creditors trying to collect unpaid debts.
What Is an Automatic Stay and How Does It Protect You?
The automatic stay prevents creditors from:
- Filing new lawsuits against you
- Continuing ongoing lawsuits for debt collection
- Pursuing wage garnishments, repossessions, or foreclosures
- Harassing you with calls, emails, or letters
However, it does not stop all lawsuits. Certain legal actions—such as criminal cases, child support proceedings, and some tax-related lawsuits—can continue even after filing for bankruptcy.
For more details on how automatic stays work, you can refer to the U.S. Bankruptcy Code, Section 362.
What Happens to Lawsuits That Are Already Filed?
- Debt Collection Lawsuits – If you’re being sued for unpaid credit card bills, medical debt, or personal loans, bankruptcy will likely pause or eliminate the lawsuit.
- Foreclosure Lawsuits – Filing for Chapter 13 bankruptcy can stop foreclosure and give you a repayment plan to catch up on missed mortgage payments.
- Eviction Lawsuits – If your landlord has already obtained a judgment for possession, bankruptcy may not prevent eviction.
- Personal Injury or Fraud Lawsuits – If you’re being sued for injuries you caused, especially under fraud or intentional misconduct, bankruptcy might not protect you.
For case-specific advice, speak with Kisch Consumer Law for a personalized case review.
What Happens to Court Judgments in Bankruptcy?
If a creditor wins a lawsuit against you, they receive a judgment, which is a court order stating that you legally owe the debt. A judgment can lead to wage garnishment, property liens, or even bank account levies.
Can Bankruptcy Eliminate a Judgment?
Yes, but only if the judgment is for a dischargeable debt such as:
- Credit card balances
- Medical bills
- Unsecured personal loans
- Utility bills
Judgments for certain debts are not discharged, including:
- Student loans
- Child support or alimony
- Certain tax debts
- Debts incurred by fraud
Does Bankruptcy Remove Judgment Liens in Texas?
A judgment lien is when a creditor secures their judgment by placing a claim on your property, like your house or car. Even if bankruptcy wipes out the underlying debt, the lien can still remain unless you take additional legal steps to remove it.
Lien avoidance in bankruptcy can help remove judgment liens if:
- The lien is on exempt property, such as a Texas homestead
- The debt behind the lien is dischargeable in bankruptcy
Since Texas has strong property exemptions, many judgment liens can be avoided, but this depends on the specifics of your case.
How Chapter 7 vs. Chapter 13 Bankruptcy Affects Lawsuits and Judgments
Your bankruptcy chapter determines how lawsuits and judgments are handled.
| Feature | Chapter 7 Bankruptcy | Chapter 13 Bankruptcy |
|---|---|---|
| Lawsuit Protection | Stops collection lawsuits | Stops lawsuits and allows repayment |
| Judgment Discharge | Eliminates eligible judgments | Can include judgments in payment plan |
| Property Liens | May require separate legal action | Can address liens over time |
| Time to Completion | 4–6 months | 3–5 years |
| Best For | Quick debt discharge | Keeping property and structured repayment |
If you’re unsure whether Chapter 7 or Chapter 13 is best for you, an experienced attorney can help you weigh your options.
FAQs About Bankruptcy, Lawsuits, and Judgments in Texas
Can a Lawsuit Continue After I File for Bankruptcy?
Most debt-related lawsuits are paused by the automatic stay, but exceptions exist for criminal cases, child support, and recent tax debt.
Does Bankruptcy Stop Wage Garnishment in Texas?
Yes, once you file, wage garnishment must stop, except for child support or alimony.
Will Filing for Bankruptcy Remove a Judgment from My Credit Report?
While bankruptcy can eliminate a debt, the judgment will remain on your credit report for up to seven years.
For a detailed explanation of how bankruptcy affects your credit, visit Experian’s guide on bankruptcy and credit reports.
Can Bankruptcy Get Rid of a Judgment Lien on My Home?
Possibly. If the lien is on exempt property, you may be able to remove it through lien avoidance.
How Long Does It Take to Resolve a Judgment in Bankruptcy?
Dischargeable debts in Chapter 7 are eliminated within four to six months. In Chapter 13, it depends on the repayment plan, typically three to five years.
For case-specific guidance, consult Kisch Consumer Law.
Why Choose Kisch Consumer Law for Bankruptcy and Judgment Relief?
If you’re facing lawsuits, judgments, or financial stress, you don’t have to navigate bankruptcy alone. At Kisch Consumer Law, we specialize in helping Texans:
- Stop creditor lawsuits and collection harassment
- Discharge eligible judgments and clear debt
- Protect assets through strategic bankruptcy planning
- Negotiate with creditors to avoid court battles
With decades of experience in Texas bankruptcy law, we make the process clear, stress-free, and effective.
Final Thoughts: Bankruptcy as a Fresh Start
Bankruptcy may seem intimidating, but it’s often the best path toward financial freedom. If lawsuits and judgments are weighing you down, filing for bankruptcy in Texas could offer the relief you need.
- The automatic stay stops lawsuits instantly
- Judgments for unsecured debts can be discharged
- Texas laws protect your home and key assets
If you’re tired of dodging creditor calls, worried about a lawsuit, or need a clear plan to erase judgments and start fresh, talk to an expert today.
Take the first step toward financial relief—schedule a consultation with Kisch Consumer Law now.