Will filing for bankruptcy stop a lawsuit?

Yes, filing for bankruptcy can stop a lawsuit. This is because when a person files for bankruptcy, all of their debtors must be notified and the bankruptcy court will issue an injunction, which is an order preventing the debtors from taking any action against the person filing for bankruptcy. In essence, filing for bankruptcy creates a legal "shield" which prevents creditors from taking any action against the debtor, including filing a lawsuit. In the state of Florida, individuals and businesses have the right to file for Chapter 7 or Chapter 13 bankruptcy. In Chapter 7 bankruptcy, all of the debtor’s assets are liquidated in order to pay off creditors. In Chapter 13 bankruptcy, the debtor is able to keep some of their assets and is responsible for paying back their debt in parts over a period of time. When a lawsuit is pending against a person or business who has filed for bankruptcy, the court will automatically issue an injunction, or “stay”, which prevents the plaintiff from taking any action against the debtor. This injunction will remain in place until the bankruptcy case is resolved. While the stay does prevent the lawsuit from proceeding, it does not necessarily mean that the plaintiff will not be able to receive compensation for their claim. The court may include the plaintiff in the list of debtors that the debtor must pay back in the plan that is created in the bankruptcy case. Overall, filing for bankruptcy in Florida can stop a lawsuit. The injunction that is issued will typically prevent the plaintiff from taking any action against the debtor, and the court can then determine whether or not the debt must be paid back as part of the bankruptcy plan.

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Will filing for bankruptcy stop a lawsuit?

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