Can You File Bankruptcy After a Lawsuit Judgment?
When faced with a lawsuit judgment, many individuals wonder if they can still file for bankruptcy. The answer can vary depending on the specific circumstances, as well as the type of bankruptcy you file. In this article, we will explore the various aspects of filing bankruptcy after a lawsuit judgment.
Understanding Bankruptcy and Judgment Debt
It is indeed possible to file for bankruptcy even after winning a civil lawsuit. Winning a lawsuit may result in a judgment in your favor, but this does not automatically mean you are financially capable of paying the judgment. If you are overwhelmed by debts and unable to pay the judgment, seeking relief through bankruptcy may be an option.
Bankruptcy Filing Regardless of a Financial Victory
If your liabilities outweigh your assets and you are unable to make payments on your debt, you can file for bankruptcy at any time. However, it is essential to consult with a bankruptcy attorney to understand the implications and processes involved, as they can vary based on the type of bankruptcy and your individual situation.
Legal Implications of Filing for Bankruptcy
While you can file bankruptcy after a civil lawsuit, it is important to note that many court awards are not sheltered and can still be considered assets. For example, a damage award from a lawsuit is typically listed among your assets. A capable bankruptcy attorney can provide guidance on the specific details of your case.
Debtor's Obligations and Legal Consequences
The consequences of not paying a judgment can be severe. If you are unable to pay the judgment, the court may garnish your wages, freeze your bank accounts, or even place a lien on your property. Therefore, it is crucial to explore all available options, including bankruptcy, to find a solution.
Types of Debts and Bankruptcy
When considering bankruptcy, it is important to understand the different types of debts that can be discharged or not. Most civil judgments or lawsuit debts are considered dischargeable, meaning they can be eliminated through bankruptcy. However, there are exceptions:
Nondischargeable Debts
Student Loans: Generally not dischargeable, except in rare cases involving undue hardship. Domestic Support Obligations: Such as alimony or child support, cannot be discharged. Government Debt: Certain government debts, like taxes, are not dischargeable. Debts Incurred from Intoxicated Driving: This type of debt cannot be discharged. Debts Incurred Due to Fraud: If the debt was incurred by fraudulent means, it is not dischargeable.Seeking Professional Help
Given the complexities involved, it is highly advisable to consult with a bankruptcy attorney who can provide specific legal advice tailored to your individual circumstances. The attorney can help you understand the potential outcomes and the best course of action to take.
Conclusion
While the possibility of filing for bankruptcy after a lawsuit judgment exists, it is important to approach this decision with careful consideration. Consulting with a bankruptcy attorney can provide valuable insights and guidance, ensuring that you make the most informed decision possible.