Will filing for bankruptcy stop a lawsuit?

Filing for bankruptcy can stop a lawsuit in Nebraska in some cases. Depending on the type of bankruptcy filing that is made, a lawsuit may be halted or affected by the filing. For example, a Chapter 7 bankruptcy filing will immediately stop a lawsuit, while a Chapter 13 filing will not prevent a lawsuit. In the case of a Chapter 7 bankruptcy filing, the filing operates as an "automatic stay" which prohibits creditors and debtors from continuing any legal action against a debtor. So, if a debtor is being sued in court, they can file for Chapter 7 bankruptcy and the lawsuit must stop until the bankruptcy case is completed. In the case of a Chapter 13 filing, the automatic stay is not as effective. The stay may prohibit a creditor from continuing their lawsuit, but it does not provide a complete protection from the lawsuit. The Chapter 13 filing will still require the debtor to pay back the debt through the repayment plan. So, while filing for bankruptcy can stop a lawsuit in most cases, it is important to understand the type of bankruptcy filing that must be made to get the desired legal protection. Depending on the type of filing, the court case may be stopped or the debtor may still be required to make payments on the debt.

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Will filing for bankruptcy stop a lawsuit?

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