How Does Bankruptcy Impact Pending Lawsuits Or Legal Claims In Ohio?

Understanding Bankruptcy

Bankruptcy was designed to provide assistance to an individual or business that has accrued a sum of debt they will not be able to pay. These federal proceedings are handled in bankruptcy court. Bankruptcy typically results in the liquidating of a debtor’s personal or business assets to be dispersed to their creditors, or a plan is put into place for the debtor to repay their creditors. While bankruptcy can result in a freedom from one’s debt, it does not come without its consequences. Bankruptcy can have a tremendous impact on an individual’s finances, including their credit score and their chances of obtaining credit for up to a decade. Bankruptcy is designed to appropriately redistribute the debtors assets and give them a new starting point to continue their lives. In many cases where bankruptcy is necessary both the debtor and the creditor benefit from the process. The responsibility of deciding the outcome is given to bankruptcy court. The court will determine if the debtor will pay back their creditors through a payment plan, or with the money collected from selling their assets.

Chapter 7 Bankruptcy

Those who file Chapter 7 Bankruptcy are seeking financial relief from debts that have grown and are no longer manageable. This process can provide someone a new chance at life, but does not come without its drawbacks. Chapter 7 Bankruptcy is typically reserved for situations where there are no other options. Debtors in this situation have typically tried to work with their creditors to find a solution and yet seek an alternative solution. A bankruptcy court may seize a debtor’s assets during this process to redistribute their money to the creditors fairly, however in some circumstances the debtor will be assigned a payment plan. Some situations leave debtors no option but to file for bankruptcy, especially in the event that their wages are being garnished, or their assets are being seized and they are no longer able to provide for themselves and their loved ones. Through Chapter 7 Bankruptcy a debtor is given the opportunity to deal with their large debts, and start a new life.

Chapter 13 Bankruptcy

Chapter 13 Bankruptcy another form of bankruptcy that allows a debtor to repay their debts in a manageable timeframe. Instead of having their assets seized, the court will create a payment plan and give them the opportunity to repay their debts without losing their home, or other crucial assets. The main advantage of filing for Chapter 13 Bankruptcy is that the debtors assets will not be liquidated. Stopping a home from being foreclosed on can give the debtor a fighting chance to maintain the life they have built, and give them an opportunity to face their financial debts. Chapter 13 Bankruptcy also consolidates the debt and will appropriately reallocate the payments to the creditors.

How Different Lawsuits Work with Bankruptcy

After one has filed for bankruptcy with the Ohio court an “automatic stay” will be issued, which protects the individual from their assets being seized. At this point the debtor has protections from their car being repossessed, wages being garnished, home eviction and home foreclosure. Bankruptcy law also protects the debtor during the bankruptcy process from pending lawsuits. Any lawsuits with a creditor will be put on hold, and the debt in question will be added to your bankruptcy claim. Any ongoing litigation in regards to outstanding debt will be stopped until the bankruptcy claim is reviewed and approved by the court. Some lawsuits may not be impacted by the bankruptcy, but there may be cases where law is not perfectly clear.

Civil Lawsuit

Often in a civil lawsuit there are different paths and special exemptions when it comes to filing for bankruptcy. In circumstances where a civil case results in a debt being discharged, the debt may or may not be included in the bankruptcy case. In some circumstances when a civil lawsuit is allowed to proceed, judgments of this civil case may result in the case being added to the debtor’s case for bankruptcy. This will depend on the civil lawsuit and the origin of the judgment.

Criminal Lawsuit

Criminal lawsuits have even more room for nuance and interpretation. In situations where the client is found to be at fault for an accident, they will still be required to pay for the damages. This is almost always the case with accidents caused by negligence that could have otherwise been avoided. In other situations the debts and judgements will be included in the bankruptcy claim with the hope that it will be discharged. Criminal lawsuits can be much more complicated with how they interact with bankruptcy cases.

Creditors & Bankruptcy

Creditors generally have a lot of weight when suing a debtor, but in the case of an automatic stay their hands become tied. A creditor has no right to pursue money payments for a loan, car, home, or other asset after the federal court declares an automatic stay. This injunction is designed to protect the debtor during bankruptcy court, so the court can correctly pass judgment and reallocate money and assets to the creditors. Creditors are required to follow the law and have no right to seek out payment during the period after bankruptcy has been officially filed. This also applies to creditors who have sued the debtor for their debts.

Will Creditors Continue Calling After Bankruptcy?

In the event that creditors are seeking payments from the debtor for a loan, car payment, or other type of debt, they must immediately stop once notified about the filing of bankruptcy. Any collection efforts after that are not legal and must be reported. In the event that creditors still try to contact the debtor, they are able to provide the creditors with a case number and request they no longer contact them until after bankruptcy court has concluded. If a lawsuit is pending or in progress it is important to contact the creditor and notify them about filing for bankruptcy. This can be done by either the debtor or their lawyer. If creditors continue to reach out seeking money or other payment their actions should be reported to the court.

Help Navigating Lawsuits During Bankruptcy

Navigating the court proceedings with bankruptcy is a convoluted process. Having a lawyer guide you through the process of filing for bankruptcy can make a massive difference. Because some bankruptcy cases are not approved, it is vital to ensure your claim is thorough and navigates the Ohio law well to avoid missteps. Consulting with a lawyer gives you their expertise and understanding of the judiciary process when it comes to creditors and personal debt. Regardless of your situation, type of bankruptcy, or what debt you have accrued, Jump Legal can provide the necessary representation and assistance for your court claim.

Do You Qualify for Bankruptcy?

There are some qualifications for bankruptcy, more specifically for different chapters. While there isn’t a minimum, there are other factors that need to be taken into account. If a debtor can pay back their debts, it is unlikely their claim will be approved by the court.

Contact Jump Legal to Learn More about Your Eligibility

Jump Legal Consultations & Services

After scheduling a consultation you will meet with one of the Jump Legal attorneys. You will be walked through the process of bankruptcy to ensure clarity, and we will look at pending lawsuits or other standing agreements with creditors before proceeding. We understand the complexities of the law, and will make each part of the process clear and easy to understand so you’re never feeling left out of the process. We want every client to feel more informed and more at ease after every meeting with one of our attorneys.

Find Help with Jump Legal

We are passionate about providing our community in Central Ohio with the best resources available for debt consolidation and bankruptcy. With help from a qualified attorney you can find a new life beyond your debts.

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Bankruptcy Law Experts in Central Ohio

Hiring the services of Jump Legal will get you access to a professional lawyer who specializes in navigating bankruptcy. As experts in Ohio state law, our team provides legal services for many parts of Central Ohio, including Upper Arlington, Dublin, Pickerington, Bexley, Canal Winchester, Powell, Grove City, Worthington, Grandview, Reynoldsburg, Westerville, and more! Our law firm specializes in bankruptcy court and continues to help families and businesses find a new path out of their debts. Whether you’re facing garnished wages, unmanageable debt, or are being harassed by creditors, contact Jump Legal in Columbus, Ohio to learn about your options for eliminating your debts. Schedule a consultation today to speak with an attorney.