What to Do If You’re Sued After Filing Bankruptcy in New York

Filing for bankruptcy can provide a fresh start but can also lead to complicated legal scenarios. If you find yourself being sued after filing for bankruptcy in New York, it’s important to know how to navigate this challenging situation effectively.

First, it’s crucial to understand that filing for bankruptcy initiates an automatic stay. This legal provision halts most collection activities, including lawsuits against you, as soon as your bankruptcy petition is filed. However, there are exceptions. Some creditors may still be able to pursue legal action if their claims are secured by collateral or if the court grants them permission to bypass the automatic stay.

If you receive a lawsuit after filing bankruptcy, here's what to do:

1. Review the Lawsuit

Carefully read the complaint or summons you received. Determine what the lawsuit is about, the parties involved, and any deadlines for your response. Understanding the nature of the lawsuit will help you determine your next steps.

2. Notify Your Bankruptcy Attorney

It’s vital to inform your bankruptcy attorney about the lawsuit immediately. They can offer specific legal advice and may be able to represent you in court if needed. If you do not have an attorney, consider hiring one experienced in bankruptcy law.

3. Respond to the Lawsuit

Failing to respond to a lawsuit can have serious consequences, including a default judgment against you. Follow the deadlines outlined in the complaint to submit your response. Your attorney can help you draft this response, which may include defenses based on your bankruptcy filing.

4. Attend Court Hearing

If the lawsuit proceeds to court, be prepared to attend any scheduled hearings. Bring all relevant documents, including records of your bankruptcy filing, so you can present your case effectively. Your attorney will guide you on what to expect and how to prepare.

5. Confirm the Automatic Stay

In some instances, you may need to file a motion with the bankruptcy court to assert that the lawsuit is violating the automatic stay. This step can protect you from further legal action by the creditor. Make sure to keep a record of all communications and actions taken regarding the lawsuit.

6. Consider Counterclaims

If the lawsuit is based on debts that were discharged in your bankruptcy, your attorney may suggest filing a counterclaim against the suing creditor. This could potentially quash the lawsuit and enforce your discharge rights.

7. Seek Additional Help

If you’re struggling to manage the lawsuit on your own, look into legal aid organizations in New York. They may offer resources or assistance for individuals facing financial difficulties.

8. Stay Informed About Your Bankruptcy Case

Continuously monitor the status of your bankruptcy case, including any correspondence from the court. Understanding your rights and obligations can assist you in resolving legal issues more effectively.

Facing a lawsuit after filing for bankruptcy can be daunting, but knowledge and the right legal guidance can help you navigate the situation. Always prioritize reaching out to a qualified attorney to ensure that your rights are protected throughout the process.