Legal Question in Bankruptcy in California
when filing for chapter 7 what is going to happen with the pending law suit.I know the court will put the automatic stop on them.but how about efter the filling? Can they come and sue us after the discharge?
2 Answers from Attorneys
Most lawsuits will be dismissed after discharge. Sometimes, a creditor might file a motion in bankruptcy court if a discharge as to that debt is impermissible, such as intentional injury to another person or entity, obligations arising out of driving under the influence, child support, etc. Otherwise, the lawsuits should go away. If you file BK, make sure to file with the state court and serve a form entitled "Notice of Stay."
Once you file the lawsuit, there is a specific for that the sate court wants you to file called a Notice of Stay of Proceedings along with proof of of your bankruptcy case number. If the debt that is the subject matter of the lawsuit is discharged, they it is the creditor's burden to dismiss the lawsuit. If the creditor does not dismiss the action, you can file a motion with the bankruptcy court to seek sanctions against the creditor.
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