Caution! Bankruptcy Doesn’t Halt ALL Lawsuits

by DeLadurantey Law Office, LLC on January 6, 2014

Caution! Bankruptcy Doesn’t Halt ALL LawsuitsMany people seek bankruptcy protection because they want to halt litigation that is pending against them. This is effective if the lawsuit is a collection matter or otherwise seeks a money judgment. It is important to note, however, that there are a few proceeding against a debtor that are not halted by a bankruptcy filing. Common examples include:

Family law matters.  A bankruptcy filing typically does not impact lawsuits regarding child support, alimony, child custody or the establishment of paternity.

Criminal proceedings.  When a debtor has a criminal action pending, the criminal portion of the lawsuit will proceed. However, if there is a debt portion related to the criminal matter, it will likely be halted by the automatic stay.

Tax proceedings.  The Internal Revenue Service (IRS) can proceed with audits, issuance of tax deficiency notices, demands for tax returns, or issuance of a tax assessment against a debtor during bankruptcy.  The automatic stay does, however, prohibit the IRS from issuing a tax lien, seizing property, and seizing income during a bankruptcy case.

Pension loans.  A debtor is allowed to have funds withheld from a paycheck to repay a loan from certain types of pensions.

If you are considering filing a Chapter 7 or Chapter 13 bankruptcy and you have lawsuits or other types of legal proceedings pending against you, confer with an experienced attorney to discuss what the automatic stay will stop and what it will not affect.

The “Milwaukee Bankruptcy Attorneys,” DeLadurantey Law Office. LLC handle Chapter 7 and Chapter 13 bankruptcies, as well as debt negotiations, debt relief, mortgage loan modifications, and foreclosure defense and debtor’s rights matters.  We serve the areas of Milwaukee, South Milwaukee, West Milwaukee, Milwaukee County, and Waukesha County, including the municipalities of Big Bend Village, Brookfield City, Brookfield Town, Butler Village, Chenequa Village, Delafield City, Delafield Town, Dousman Village, Eagle Town, Eagle Village, Elm Grove Village, Genesee Town, Hartland Village, Lac La Belle Village, Lannon Village, Lisbon Town, Menomonee Falls Village, Merton, Town, Merton Village, Mukwonago Town, Mukwonago Village, Muskego City, Nashotah Village, New Berlin City, North Prairie Village, Oconomowoc City, Oconomowoc Lake Village, Oconomowoc Town, Ottawa Town, Pewaukee City, Pewaukee Village, Summit Town, Sussex Village, Vernon Town, Wales Village, Waukesha City, and Waukesha Town.  Call DeLadurantey Law Office by phone at (414) 377-0518.

 

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