Can Filing for Bankruptcy Protect You from a Lawsuit in NV?

How a Reno Bankruptcy Attorney Can Help If You’re Facing a Lawsuit From Your Creditors

No one plans to get into trouble with debt. Maybe you just spend a little more than you intend on your credit cards, and the bills slowly start to get away from you. Or maybe the problem is more sudden but unexpected. Maybe you lose your job or get seriously ill, and you don’t have the money to pay what you owe. You may start to get letters telling you that your bill is late and that now you have a late fee, on top of the interest you owe. But as time goes on, those letters will come more frequently and your phone will start ringing seemingly non-stop.

Eventually, you are likely to get notice that your creditors are planning to take legal action against you, such as garnishing your wages. You may even be subject to a lawsuit. You can certainly hire a lawyer to try to fight this legal action, but the most effective thing you can do is likely to call a Reno bankruptcy lawyer.

Bankruptcy and the Automatic Stay

Filing for bankruptcy will do much more than discharge your debts and help you get your finances back under control. When you file for bankruptcy, it also triggers what is known as the automatic stay. What the automatic stay does is put an end to all action against you by your creditors – at least temporarily while the bankruptcy trustee can review your filing and make a determination.

The first thing you should notice when the automatic stay is triggered is that the calls and letters from your creditors stop. If you get a call or two, it may simply be that the creditor hasn’t yet received notice of the stay or it hasn’t processed all the way through its system. You can simply inform your creditor that you have filed for bankruptcy and refer any future communications to your Reno bankruptcy attorney.

Discharging Debts and Your Lawsuit

What happens to your lawsuit depends on what happens in your bankruptcy. Say you are being sued by a hospital for some medical bills. If you have filed for Chapter 7 bankruptcy and the medical debts are discharged, the hospital would no longer have a legal claim against you. The lawsuit would be dismissed, as well.

However, if you owe money on a secured debt, such as your home, the outcome will be different. Simply filing for bankruptcy cannot automatically put a stop to a foreclosure. You may be able to file for Chapter 13 bankruptcy, which could include the amount you have fallen behind on your mortgage in a debt reorganization plan that lasts three to five years. Depending on how much you owe, you may be able to include that amount in your Chapter 13 bankruptcy and save your home from being lost to foreclosure. Exact outcomes will depend on what you owe, what kind of debt it is, your income, and many other factors.

Always talk to a bankruptcy attorney in Reno to explore your options if you are struggling with debt. Being notified of a lawsuit is not the end, and you do not have to be intimidated by it. You have options. Talk through your financial circumstances with a bankruptcy lawyer and learn how filing for bankruptcy can give you debt relief and possibly put an end to your legal troubles. You may be able to have the financial freedom you crave much more quickly than you realize.

Call Zero Down Bankruptcy Lawyers of Reno today if you are struggling with debt or are facing a lawsuit or other legal action because of your debt. Our experienced bankruptcy attorneys represent clients in emergency bankruptcy filings and routine filings, including Chapter 7 bankruptcy and Chapter 13 bankruptcy. We can help you figure out which will give you the most debt relief, as well as which could help you put an end to a lawsuit if you are facing one. We’ll carefully review your finances and help you understand all your legal rights and options. We offer our services with no money down. Call us in Reno today to schedule a free consultation with a bankruptcy attorney and learn more.