MYTH: It’s Too Late To File Bankruptcy If You Have Been Sued
This is a false statement. One of the best times to file for bankruptcy is after you have been sued. No matter where in the process of a law suit a creditor may be against you, filing chapter 7 or chapter 13 bankruptcy can give you relief from a law suit, a sheriff’s auction, a judgement, or a wage garnishment.
Additionally, declaring bankruptcy will stop whatever law suit you have against you for an unpaid debt. Once you file for bankruptcy protection an “Automatic Stay” goes into play. This protection under Section 362 of the Bankruptcy Code is a very powerful provision. Thus, the Automatic Stay makes all collection activities to immediately cease.
Also, please keep in mind that a debt that is otherwise dischargeable before a lawsuit is started against you generally still going to be dischargeable in your bankruptcy, even if the creditor has gotten a judgment against you. Thus, with or without a law suit against you, declaring bankruptcy in Phoenix will protect you from additional collection action.
Bankruptcy is also helpful if you are having wages garnished, if your home is in foreclosure, or in most cases if your car is soon to be repossessed. Therefore, if you are at a point where your finances have got away from you, please seek the assistance of our Phoenix Bankruptcy Lawyers right away. With Free Consultations, Bankruptcy by Phone, Zero Down Bankruptcy Option, and thousands of successfully filed Arizona bankruptcies our debt relief team is the help you seek.