What Should I Do If a Creditor Sues Me After I’ve Already Filed Bankruptcy?

Receiving a lawsuit from a creditor after you have already filed for bankruptcy can be shocking and confusing. You thought you had taken the necessary legal steps to keep a lawsuit from happening, so a court summons can feel incredibly unfair and frightening. You might immediately worry that something has gone wrong with your case.

Try to take a deep breath. At Whitten & Whitten, our attorneys have over 30 years of experience guiding clients through the bankruptcy process in Northwest Indiana. During that time, we have encountered nearly every possible complication, including post-filing lawsuits from creditors. We have successfully equipped our clients to overcome these challenges.

Here is exactly what you need to do when a creditor sues you after you have filed for bankruptcy:

• Breathe and remember your rights: The “automatic stay” protects you. This lawsuit is likely a simple timing error.
• Call your bankruptcy attorney immediately: Do not ignore the notice or try to talk to the creditor yourself.
• Let your attorney serve official notice: Your legal team will inform the creditor and court of your bankruptcy case number, forcing them to drop the lawsuit.
• Avoid default judgments: Make certain that the hearing is canceled so you do not receive an unfair judgment against you.

How Fast Does the Automatic Stay Stop Creditor Lawsuits?

The moment you file for bankruptcy, a powerful legal shield called the automatic stay goes into effect immediately. This is a federal court order that instantly freezes all collection attempts, including lawsuits. However, administrative delays sometimes happen.

Courts and creditors do not communicate instantly. It often takes a few days or even weeks for creditors to process a bankruptcy notice. The lawsuit you received was likely mailed before the creditor’s legal department realized you filed. Just know that because you’ve filed for bankruptcy, the lawsuit is illegal and must be dropped.

How Do I Give the Creditor Notice I’ve Filed for Bankruptcy?

Even though you are legally protected, you cannot simply ignore the lawsuit. You must let your legal team know about the situation right away. Ignoring a court summons is never a good idea, even when you have the law on your side.

Once you send your attorney the lawsuit documents, they will step in. Your attorney will contact the creditor’s lawyers directly, formally serving them with your bankruptcy notice and case number. They will also file a formal notice with the court, informing them of your bankruptcy filing. You do not have to speak to the creditor or figure out complicated legal paperwork. Your attorney handles the heavy lifting to stop the creditor in their tracks.

Will I Still Have to Go to Court for the Hearing Date?

Typically, you will not have to attend the hearing for the lawsuit. As long as your attorney notifies the creditor of your bankruptcy filing in a timely manner, the creditor is required to dismiss the lawsuit and cancel the hearing.

However, you should be cautious if the hearing date is only a few days after you file for bankruptcy. If the court is unaware of your filing and you do not attend, the creditor could win by default judgment. It is wise to attend the hearing unless your attorney confirms the case has been dismissed and your appearance is not necessary.

Focus on Your Fresh Start Today

Receiving a creditor lawsuit after filing for bankruptcy is usually just a crossing of wires. The automatic stay protects you from debt collection, and the lawsuit holds no power as long as you act quickly.

At Whitten & Whitten, we act quickly to resolve these matters. We will immediately contact the creditor and the court to get the lawsuit dismissed, allowing you to focus on your fresh start. Contact our office today for a free consultation, and let us handle the rest.