Bankruptcy’s automatic stay stops most lawsuits once the bankruptcy is filed. Typically, you will not be able to file a lawsuit if it relates to certain debts which include: personal loans, credit card balances, medical bills, utility bills, unpaid rent, unpaid car payments, home foreclosures or accidental personal injury cases.
There are some instances where the lawsuit can continue despite a bankruptcy being filed. For example, filing bankruptcy will not stop a criminal case. Divorce and custody cases are not directly affected by the filing of a bankruptcy. If the person filing for bankruptcy caused a death or injury while intoxicated, the lawsuit against them can usually continue. Also, lawsuits, where debts arise after the filing of bankruptcy, can continue. Meaning if the debtor causes an accident one month after filing bankruptcy and damages your car, you can file a lawsuit against them.
For matters arising before the bankruptcy was filed, you may be able to petition the bankruptcy court for relief from the automatic stay so that your lawsuit may continue. Whether the court would grant your request depends on the circumstances.
Michael A. Cibik, Esquire
Michael A. Cibik is a partner at the Philadelphia law firm of Cibik & Cataldo, P.C. He is one of the few bankruptcy attorneys in the Philadelphia area certified by the American Bankruptcy Board.
If you or someone you know is having financial problems, stop worrying and call Michael at (215) 735-1060 for a free consultation.
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Cibik & Cataldo
1500 Walnut St Suite 900
Philadelphia, PA 19102