How to Handle Lawsuits While Filing for Bankruptcy in Texas

Can Bankruptcy Protect You from Creditor Lawsuits in Texas?

Dealing with a lawsuit is stressful enough, but when financial challenges pile up, it can feel overwhelming. Bankruptcy offers a powerful shield against creditor lawsuits, helping Texans protect their assets and regain financial stability. But how does it work, and what steps should you take? Let’s break it down.

How Does Bankruptcy Affect Creditor Lawsuits in Texas?

The Automatic Stay: Your Legal Shield

When you file for bankruptcy, an automatic stay goes into effect immediately. This court-ordered protection halts most lawsuits, wage garnishments, and collection actions against you.

• Creditor Lawsuits: The automatic stay pauses ongoing lawsuits related to debts like credit cards, medical bills, or personal loans.
• Foreclosures and Evictions: Bankruptcy can temporarily stop foreclosures or evictions, giving you time to address financial challenges.
• Wage Garnishments: Any wage garnishments tied to unsecured debts must cease during the bankruptcy process.

(Learn more about the automatic stay from US Courts)

Lawsuits Not Affected by Bankruptcy

Certain types of lawsuits are not stopped by bankruptcy, including:

• Criminal Cases: Bankruptcy does not halt criminal proceedings or fines.
• Child Support or Alimony: These obligations continue, even during bankruptcy.
• Certain Tax Debts: The IRS may still pursue specific tax claims.

What Happens to Ongoing Lawsuits During Bankruptcy?

Chapter 7 Bankruptcy

• Unsecured Debts: Lawsuits related to unsecured debts like credit cards or medical bills are typically resolved through discharge, eliminating your obligation to pay.
• Secured Debts: If a lawsuit involves secured debts (e.g., a car loan), you may need to surrender the asset or negotiate terms.

Chapter 13 Bankruptcy

• Debt Repayment Plan: Ongoing lawsuits are included in your structured repayment plan, allowing you to manage obligations over 3–5 years.
• Asset Protection: Chapter 13 allows you to keep assets while making affordable payments to creditors.

FAQs About Lawsuits and Bankruptcy in Texas

Can I File for Bankruptcy If I’m Being Sued?

Yes, filing for bankruptcy is an effective way to stop most lawsuits. The automatic stay prevents creditors from pursuing legal actions during the bankruptcy process.

What Happens If a Lawsuit Is Already in Progress?

If the lawsuit pertains to a dischargeable debt, it will pause under the automatic stay. Bankruptcy can resolve or dismiss the lawsuit entirely once the debt is discharged.

Will Bankruptcy Protect My Home or Car?

Yes, Texas bankruptcy exemptions often protect essential assets like your home and vehicle, even if lawsuits involve secured debts.

Can Bankruptcy Stop Wage Garnishment?

Yes, bankruptcy halts wage garnishments for unsecured debts immediately after filing.

(Learn more about bankruptcy protections from TexasLawHelp.org)

Steps to Handle Lawsuits While Filing for Bankruptcy in Texas

Step 1: Consult an Attorney

Seek advice from a bankruptcy attorney experienced in Texas laws. They’ll evaluate your situation and recommend the best course of action.

Step 2: File for Bankruptcy

Work with your attorney to file a Chapter 7 or Chapter 13 bankruptcy petition. The automatic stay will take effect once your case is filed.

Step 3: Notify the Court and Creditors

Provide notice of your bankruptcy filing to the court handling your lawsuit and the creditor pursuing it. This ensures the lawsuit is paused under the automatic stay.

Step 4: Resolve or Discharge the Lawsuit

Depending on the type of debt, bankruptcy may discharge the lawsuit (Chapter 7) or include it in a repayment plan (Chapter 13).

Why Choose Kisch Consumer Law?

At Kisch Consumer Law, we specialize in helping Texans navigate lawsuits and bankruptcy with confidence. Whether you’re facing wage garnishment, foreclosure, or creditor harassment, our team can provide tailored solutions to protect your rights and assets.

Our Expertise Includes:

• Evaluating your eligibility for Chapter 7 or Chapter 13 bankruptcy.
• Crafting strategies to stop lawsuits and protect your property.
• Navigating Texas bankruptcy laws to achieve the best outcomes.

Ready to regain control of your financial situation? Visit us here to schedule a consultation today.

Quick Tips for Handling Lawsuits During Bankruptcy

• File Early: The sooner you file, the faster the automatic stay can stop legal actions.
• Keep Records: Maintain detailed documentation of lawsuits, creditor communications, and court notices.
• Work with Professionals: A skilled attorney can ensure you take full advantage of bankruptcy protections.

Take Control of Your Financial Future

Facing a lawsuit while dealing with financial struggles can feel like a losing battle. But bankruptcy offers a lifeline, halting lawsuits and giving you the chance to rebuild. With the right strategy, you can protect your assets, resolve debts, and move forward.

And remember: even in the toughest legal battles, you’re not alone. With the right support, you can turn the tide in your favor.