People can be sued for all sorts of reasons. From personal injury lawsuits to large company fiascos, feuding parties are always in the court rooms trying to gain compensation from one another. If you were low on finances to begin with, you may be terrified by where a lawsuit will place you. If you are forced to pay a large amount of money, you may end up with nowhere left to turn except for bankruptcy. Actually, this may not be a bad idea. For people who are in a financial bind, a bankruptcy can stop the lawsuit. This is because most creditors can't continue the lawsuit when an automatic stay is invoked. They can't try to collect a debt against the bankruptcy debtor.

An automatic stay is a little bit like a restraining order. It can stop creditors from calling you and telling you that you have a debt to pay. If you owe companies money, then they will need to leave you alone until they receive a discharge from their debts. They will obtain their money by gaining from your assets when they are liquidated. If you are being sued for a debt that is dischargeable, then that will be eradicated if you file for bankruptcy. However if your debt isn't dischargeable, you will still need to pay it in full, so you will want to look into this before determining whether or not to file.

If you are being sued by a collections agency, then bankruptcy is certainly your best choice if you can't pay the funds through other means. These lawsuits are almost always dischargeable, and the creditors will be satisfied once they get their funds from you. The lawsuit will stop when you file, because there will be nothing left to fight for. Creditors can't bother you after you've filed, so they certainly can't take you to court.

If you are being sued for a reason other than a collections lawsuit, you will want to talk to your attorney about whether or not filing for bankruptcy will help you. Look into the different kinds of bankruptcy. Sometimes a Chapter 7 bankruptcy might now help you out, but a Chapter 11 will, or a Chapter 13. You will need to discuss all of these options and weigh the pros and cons of filing. As a warning, there is never a complete guarantee that filing for bankruptcy will solve all of your financial lawsuit problems. The different court cases can range from a simple collections trial to a complex business tort case.

Whenever you are dealing with a financial lawsuit, you need to answer to the complaint, unless you agree with the contention of the lawsuit. You will want to answer if you have a legitimate defense or need time to consider your options. When you are faced with a financial lawsuit, they are probably suing you for a debt you already owed. The only difference now is that a judgment lien is only avoidable if the debtor can impair it as an exemption. Most of the time, your creditors are only concerned about getting the amount of money you owe.

They don't really care how they get it. If bankruptcy can satisfy their amount, then they are fine with this motion. In fact, this is how most lawsuits are. If you can obtain the money that you need to pay the plaintiff back, then he or she should be satisfied regardless of whether or not you had to file bankruptcy to get there. However, if your case involves fraud, then the debt may not be dischargeable. You will have to accommodate for the finances through means other than a bankruptcy.