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Lawsuits and Bankruptcy
Questions about lawsuits and bankruptcy?
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Are lawsuits discharged in filing a Washington State bankruptcy?
If you are being sued, a bankruptcy can stop a lawsuit immediately. Not only are creditors’ collection suits stopped, but other suits must stop as well, such as personal injury lawsuits.
If the debt you are being sued for is dischargeable, the lawsuit is stopped forever by a bankruptcy discharge so you can never be sued again for that reason. Uninsured accidents can be discharged unless they are for death or personal injury resulting from a DUI.
If you can sue another person to recover money or property, the right to file or continue the lawsuit is property of the “bankruptcy estate”. That is, you have to give up your ability to control the lawsuit to a bankruptcy trustee. You can protect part of any money you receive through “exemptions” like with any other piece of property in your bankruptcy.
The amount you can protect depends on what kind of lawsuit it is. Sometimes bankruptcy is necessary if you are drowning in debt and waiting for a big settlement or judgment. If you have a pending lawsuit, or the right to sue someone, but need bankruptcy help, you should contact a bankruptcy attorney right away.