Can Bankruptcy Stop a Lawsuit?

Will Filing Bankruptcy Stop a Civil Lawsuit?

It depends on the type of lawsuit.

✅ Filing bankruptcy can stop debt-related lawsuits, including:

• Lawsuits over unpaid credit cards, personal loans, or medical bills

• Collection actions from debt buyers or agencies

• Utility disconnection lawsuits

• Foreclosure actions on your home (at least temporarily)

• Some eviction lawsuits, depending on where your case is and whether a court has already ordered you to leave

✋ Filing bankruptcy may temporarily pause, but doesn't generally stop:

• Proceedings to establish paternity

• Proceedings to establish or modify child support or alimony

• Child custody and visitation matters

Bankruptcy also doesn’t stop criminal cases from moving forward. 

✨ If you want to file Chapter 7, you may be eligible to use Upsolve's free filing tool. It just takes two minutes to see if you're eligible, and our services are 100% free. Thousands of people have used Upsolve to get rid of judgment debt for good.

Does Bankruptcy Stop Foreclosure and Eviction Lawsuits?

If you’re facing a foreclosure or eviction lawsuit, filing bankruptcy can provide some immediate relief, but it’s often temporary.

When you file for bankruptcy, an automatic stay goes into effect. This stops almost all collection activity, including debt lawsuits, wage garnishment, and bank levies. This pause can give you some breathing room to figure out your next steps, but it’s not a long-term fix for evictions and foreclosure. 

For example, in a foreclosure, the lender may be able to resume the process after the bankruptcy case is resolved, unless you’ve caught up on missed payments or worked out a deal. Similarly, in eviction cases, landlords can often ask the court to lift the automatic stay if the eviction is due to non-payment or a lease violation.

Can You File Bankruptcy After a Judgement?

Yes. You can file bankruptcy to get rid of judgment debt, which also includes default judgments.

💡 A default judgment happens when you don’t respond to the lawsuit or show up in court, and the creditor automatically wins.

Bankruptcy also stops many collection actions related to the lawsuit, including wage garnishments, bank levies, and property liens.

If you're eligible to use Upsolve's free filing tool, you may be able to get rid of your judgement debt and other qualifying debts and get a fresh start with Chapter 7.

Does Bankruptcy Stop Wage Garnishment?

Yes. If a creditor or debt collector wins a debt collection lawsuit, it won't take them long to ask the court for permission to garnish your wages. You can stop this before it starts by filing bankruptcy.

If the garnishment has already started, bankruptcy law stops it and protects your future wages. 

Can Bankruptcy Clear Lawsuit Debt?

Generally speaking, yes. As long as the underlying debt is dischargeable, the lawsuit debt is dischargeable as well. For example, if you were sued for an unpaid credit card bill and the creditor won a judgment against you, filing for bankruptcy can typically wipe out that debt, including the judgment. 

That said, if the debt you were sued over is not dischargeable — such as recent tax debt or court-ordered child support — bankruptcy won’t change that. The nature of the debt remains the same.

⚠️ One exception is lawsuits for fraud. If the lawsuit was based on a claim of fraud or other bad acts, the lawsuit debt may not be dischargeable in bankruptcy.

If you’re facing a fraud lawsuit, it's a good idea to talk to an experienced bankruptcy lawyer who can help you figure out your best options. Upsolve can help set up a free consultation with an experienced bankruptcy attorney near you.

Should I Fight the Debt Collection Lawsuit or File Bankruptcy? 

Fighting a debt collection lawsuit can be a good option in some cases, especially if you don’t actually owe the debt or the debt collector can’t prove you do. Read the court summons and complaint paperwork carefully to see where you stand. If you respond to the lawsuit and show up in court, you might even win if the creditor doesn’t have the proper paperwork. 

If you're worried about responding on your own but can't afford a lawyer, you can draft an answer letter for a small fee using SoloSuit. They've helped over 340,000 people respond to debt lawsuits, and they have a 100% money-back guarantee.

SoloSuit is an affiliate partner, which means Upsolve may earn a small commission if you choose to use their paid service. This helps keep our services free.

But this only helps with that one debt. If you’re juggling other unpaid bills, lawsuits, or collection calls, filing for bankruptcy might be your best bet to tackle everything at once. Bankruptcy doesn’t just stop one lawsuit — it puts an immediate stop to all collection actions, including calls, wage garnishments, and new lawsuits. 

It also wipes out most unsecured debts, like credit cards and medical bills, giving you a clean slate. While defending a single lawsuit might work for some, bankruptcy can be a stronger option if you’re dealing with more than just one debt or need relief from constant financial stress.

What’s a Judgment Lien and Why Should I Care?

A judgment is a court order that says you owe money to someone, and it can lead to a judgment lien. A judgment lien lets the creditor claim part of the value of your property, like your home, if you sell it. State laws decide how and when this can happen, but this matters because a lien can make it harder to sell or refinance your home. 

More importantly, it also changes the nature of your debt, turning unsecured debt like credit card bills into secured debt tied to your property. The good news is that in many bankruptcy cases, if the only property you own is protected by exemptions, the bankruptcy court can remove the lien, giving you some relief.

If the property isn’t fully covered by exemptions, the lien stays in place. The creditor could still claim part of the property’s value if it’s sold during or after the bankruptcy. 

What Happens if I Sue Someone Before I File Bankruptcy?

If you have a lawsuit pending against someone else, the lawsuit is considered an asset of your bankruptcy estate. In other words, if you’re suing someone and could win money or property, that potential payout becomes part of what the bankruptcy court can use to pay your debts. 

This most commonly happens with personal injury cases. If you’re involved in a personal injury lawsuit, the bankruptcy trustee handling your Chapter 7 bankruptcy will take it over.

The federal bankruptcy exemptions, and some state exemptions, protect personal injury claims up to a certain amount.

If you’re in an opt-out state and required to use your state’s exemptions during bankruptcy, it’s often recommended that you speak to a bankruptcy attorney. They’ll be able to explain how bankruptcy law will affect your case. This is especially important if you have ongoing medical bills you’re hoping to pay with money from the lawsuit.

What Happens if You Sue Someone and They File Bankruptcy?

If you sue someone and they file for bankruptcy, your lawsuit will typically stop because of their automatic stay.

This legal protection freezes most collection actions, including lawsuits, as soon as the bankruptcy is filed. Ignoring the stay and continuing your lawsuit can lead to penalties from the bankruptcy court, so it’s important to stop your case immediately.

There are some exceptions to the automatic stay. For example, lawsuits related to child support or other family court matters aren’t affected by the stay and can move forward. If your case doesn’t fall into one of these exceptions, you’ll need to wait for the bankruptcy process to play out or seek permission from the bankruptcy court to continue your case.

Let’s Summarize...

If you’ve been sued by a creditor because you can’t pay your debts, filing bankruptcy will stop the lawsuit. You can also file bankruptcy after you’ve already lost the lawsuit and a judgment has been entered against you.

If you qualify for Chapter 7 bankruptcy, Upsolve may be able to help you file your case for free using our online tool. Upsolve has helped thousands of people discharge almost $980 million in debt. If you want or need legal guidance, you can set up a free consultation with a bankruptcy attorney in your area.