Filing for bankruptcy is a difficult legal process on its own, but often filers can be simultaneously
dealing with lawsuits and other legal actions. The help of a bankruptcy attorney is the key to
successfully navigating the complexities of any type of bankruptcy. With the legal advice and
assistance of Behm Law Group, Ltd. attorneys, we can help you understand how lawsuits will be
handled when you file for bankruptcy in Redwood Falls, MN.
It’s not unheard of for someone to be working through multiple legal proceedings at the same
time, and bankruptcy is no exception. If you’re considering filing for bankruptcy but you are
worried how it may affect another lawsuit or court process you’re currently working through or one
that you suspect you may encounter soon, Behm Law Group, Ltd. can help you determine
whether entering into bankruptcy is the right choice given your situation.
The most common lawsuits individual consumers encounter can often be handled at the same
time as a bankruptcy case.
Domestic Disputes: Divorce, child support suits, alimony claims, and other common domestic
court actions will have little to no effect on bankruptcy proceedings. This means the court will
allow both processes to continue, without staying or suspending the domestic disputes, until the
bankruptcy concludes. The exception is that some courts will delay discharge and debt
reorganization results until final divorce settlements on property are determined.
Criminal Proceedings: Because criminal cases are handled through local governments and
police powers, they’re often unaffected by bankruptcy proceedings. For violent crimes, theft, and
other common criminal allegations, a bankruptcy filing won’t interfere. However, if the criminal
proceedings involve other money and property related schemes (i.e. bad checks, fines, fraud)
against the government, the potential fines and payments involved are sometimes suspended by
the automatic stay of 11 U.S.C. §362. This effectively halts court proceedings until the bankruptcy
is concluded or the automatic stay is lifted for another reason.
Bankruptcy-Related: Lawsuits can also arise during a bankruptcy case. While creditors are
prevented from collecting pre-bankruptcy debts when a bankruptcy case is filed and the
automatic stay is implemented, they can commence lawsuits against you in bankruptcy court to
request that their debts not be discharged. Many such claims are asserted under 11 U.S.C. §523
(Exceptions to Discharge). For instance, a creditor that extended you credit or lent you money
can sue you in bankruptcy and request a bankruptcy court not to discharge any debt incurred as
a result of alleged fraudulent conduct, such as providing a creditor with a false financial
statement.
Other: Lawsuits like foreclosure and eviction are handled from case to case in bankruptcy, but
are often dismissed or suspended as a result of a bankruptcy proceeding. Other common
lawsuits such as building code enforcement and administrative court actions are almost always
unaffected by bankruptcy proceedings. If you want to bring a lawsuit against another party while
you’re filing for bankruptcy, you can often do so without any obstacles, but you absolutely should
list any such claim as an asset in your bankruptcy petition and related schedules. Sometimes, the
bankruptcy trustee administering your case will have an interest in any such claim and must be
involved. However, there are cases when the automatic stay must be lifted to continue with the
legal action.
If you’re struggling to reconcile multiple legal processes, Behm Law Group, Ltd. can help. Contact
us at (507) 387-7200 today to learn more about filing for bankruptcy in Redwood Falls, MN.
