Eliminating Lawsuits, Judgments and Garnishments in Bankruptcy
September 26, 2014
The Solution to Lawsuits
As a Michigan bankruptcy law firm who handles cases in Macomb, Oakland, Wayne, St. Clair and Sanilac Counties, our office is often called by residents “freaking out” after being served with lawsuit papers, receiving notice that a judgment has been taken against them, or that a garnishment has been placed against their wages.
Bankruptcy laws are powerful, and they can essentially kill a lawsuit at any stage. Under bankruptcy laws, sometimes referred to as the bankruptcy code, the very moment a person files for bankruptcy, certain things automatically happen. The most important of those is that ALL creditor actions are immediately stopped, or “stayed,” by law. Almost anything a creditor does the second after a bankruptcy case is filed, and even in the creditor had no way to know about it, must be undone. This is particularly true with wage garnishments, where money taken from a paycheck may have to be returned.
These benefits are crucial to a successful bankruptcy process and can offer immediate relief from creditors and the stress of juggling lawsuits, judgments and garnishments.
No More Lawsuits, Judgments, Garnishments
We have good news: If a person is eligible to file for bankruptcy, lawsuit proceedings can be stopped dead in their tracks. Moreover, in many cases, if a person’s wages have already been garnished the funds can be recovered by a skilled Detroit bankruptcy lawyer.
The most important part of all of this is known as the automatic stay provision. Automatic stay is a provision of the bankruptcy code that essentially freezes all proceedings against the person who filed for bankruptcy. This happens instantly and means anything that occurs, even one second after the bankruptcy is filed, is considered void.
Therefore, a person who files for bankruptcy is protected from any lawsuits, judgments, garnishments or other collection efforts at the very moment their case is filed. This is perhaps the strongest single law on the books. Think of it as a great big hammer that smashes your debts and problems to bits (including your stress and worry).
A Legal Multi-Tool
In a very real way, the automatic stay injunction is a legal multi-tool. Under bankruptcy law you are protected from creditors and those pursuing lawsuits against you, regardless of the stage of the lawsuit.
- If someone is about to sue you, once bankruptcy is filed, they cannot.
- If someone has already sued you, and the case is still active, bankruptcy law requires the court where the case is pending to close it down immediately.
- If someone has sued you, and has already obtained a judgment, the filing of a bankruptcy essentially “voids” that judgment.
- If someone has begun collecting on a judgment they obtained against you, bankruptcy law not only stops any further collection activities, but may also require that the person who obtained the judgment pay you any amount of money back that they took, if the total amount is greater than $600, and was taken within 90 days before the date the bankruptcy was filed.
Of course, it makes far more sense to file a bankruptcy before money or property is taken, but the bottom line is that it is never too late to file for bankruptcy. As a Macomb County bankruptcy law firm for nearly 25 years, we can attest to the relief a bankruptcy notice brings clients. To have all of the pressure related to your debt go away is immeasurable.
Let the law work for you. Don’t let the worry and stress of lawsuits get the best of you. Moving forward with the bankruptcy process can be the answer to your financial woes.