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How will lawsuits be affected?

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Updated: 4/13/2007 6:35 pm
The minute you've filed for Chapter Seven bankruptcy, the court imposes what is known as an 'automatic stay,' which is in effect until your case is confirmed or discharged. The automatic stay immediately halts any lawsuits pending against you or enforcement of judgements against you, and it prevents creditors from filing lawsuits. Most civil judgments are stopped by bankruptcy, but there are several types of debt liability that are not dischargeable under law, including results of certain civil and criminal court proceedings. These include: a criminal case against you, a paternity or child support case, or a tax audit. Will bankruptcy stop an eviction or 'unlawful detainer' action? Perhaps. However, this will only delay the inevitable. The owner is entitled to possession of his property and, at best, you will be able to remain in the property only until you've received your discharge from bankruptcy or the landlord obtains an order from the bankruptcy court. If the only reason you filed for bankruptcy is to stop an eviction or other lawsuit against you, this may be considered an abuse of Chapter 7. If the bankruptcy court finds this to be true, the court can immediately dismiss the bankruptcy and impose other legal and monetary sanctions on you. To find out whether any lawsuit you're involved in will be affected by filing Chapter Seven, contact a bankruptcy attorney.
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