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Bankruptcy: I Just Got a Lawsuit

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Question: I just had some process server come to my house and give me court papers. I'm being sued by a debt collector because I didn't pay a credit card bill. The bill is from several years ago when I was unemployed and I used my credit cards to live on. I bought food, gas and paid my rent with the credit cards.

Now I have to go to court in Fulton County. They want over $10,000. But I don't have that kind of money. I don't want a wage garnishment because I know they can take a lot of money from my paycheck. I'm worried that if my pays gets garnished then I won't be able to pay my mortgage or car loan.

I know I need to file bankruptcy now. I've put it off for too long and now I'm being sued.

My question is do I need to go to court for the lawsuit even if I'm going to file bankruptcy. If I file bankruptcy before my court date, do I still have to go to court in Fulton County?

C.R. in Roswell, GA

Answer: Like many bankruptcy questions, the best answer is that it depends.

If the bankruptcy, either a chapter 7 or a chapter 13, is filed before you go to court, then you do not necessarily have to go to the court date for the credit card lawsuit. That is because when the bankruptcy is filed a "stay" goes into place. The stay, at least temporarily, prevents any actions from creditors regarding your debts.

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