Ready to say goodbye to student loan debt for good? Learn More
X

What Happens in Bankruptcy if I Have a Potential Lawsuit for Money?

1 minute read Upsolve is a nonprofit that helps you get out of debt with education and free debt relief tools, like our bankruptcy filing tool. Think TurboTax for bankruptcy. Get free education, customer support, and community. Featured in Forbes 4x and funded by institutions like Harvard University so we'll never ask you for a credit card.  Explore our free tool


In a Nutshell

This depends: Are you being sued or are you the one suing someone else? If you file bankruptcy a lawsuit against you is stopped. If it's your lawsuit, your trustee will decide what happens.

Written by Jonathan Petts
Updated April 19, 2022


If you file bankruptcy and you're in a lawsuit that's pending, you may be wondering what happens. The answer depends on whether you're suing someone or someone is suing you.

If someone is suing you for money, there's a good chance that the lawsuit will be delayed or even dismissed once you file bankruptcy. After all, once your debts are wiped clean by your bankruptcy, you'll no longer owe most lenders anything. No debt means no lawsuit. Make sure that you tell the judge and, if possible, the other party's attorney once you file bankruptcy so that the case is handled appropriately.   

If you're suing someone else for money, any money that person is required to pay you (called damages) can be seized by the bankruptcy trustee if no exemption is available to protect it. The trustee essentially steps in your shoes with respect to the lawsuit. It's important to list any and all lawsuits you file against others on your bankruptcy forms, as you may forfeit the right to proceed with the lawsuit if you don't.



Written By:

Jonathan Petts

LinkedIn

Jonathan Petts has over 10 years of experience in bankruptcy and is co-founder and CEO of Upsolve. Attorney Petts has an LLM in Bankruptcy from St. John's University, clerked for two federal bankruptcy judges, and worked at two top New York City law firms specializing in bankrupt... read more about Jonathan Petts

It's easy to get debt help

Choose one of the options below to get assistance with your debt:

Considering Bankruptcy?

Our free tool has helped 14,891+ families file bankruptcy on their own. We're funded by Harvard University and will never ask you for a credit card or payment.

Explore Free Tool
14,891 families have filed with Upsolve! ☆
or

Private Attorney

Get a free evaluation from an independent law firm.

Find Attorney

Learning Center

Research and understand your options with our articles and guides.

Go to Learning Center →

Already an Upsolve user?

Read Support Articles →
Y-Combinator

Upsolve is a 501(c)(3) nonprofit that started in 2016. Our mission is to help low-income families resolve their debt and fix their credit using free software tools. Our team includes debt experts and engineers who care deeply about making the financial system accessible to everyone. We have world-class funders that include the U.S. government, former Google CEO Eric Schmidt, and leading foundations.

To learn more, read why we started Upsolve in 2016, our reviews from past users, and our press coverage from places like the New York Times and Wall Street Journal.