There has been a large wave of debtors who have been sued by the creditors in the last few years. The situation is one that many are familiar with. You, the debtor, have surmounting debt from use of credit cards, personal loans, payday loans, or have borrowed money from a friend that you are unable to pay off. So, you just stop paying and the debt continues to rise and rise until it is impossible to pay back even if you were on a payment plan for the rest of your life. Then one day, you happen to receive a Summons stating that you are being sued by one, two, three or all of your creditors for the debt owed. As a bankruptcy attorney in the San Francisco Bay Area, I know that this is a common occurrence. I also know that this causes a lot of stress on a person to be summoned to court for a lawsuit on a debt that they know they owe. Whether or not you show up to the hearing or write a response is mostly futile in these situations since the creditor only needs to show that you owe the money–which you do. The creditor will inevitably obtain a judgment, which is basically just a court order that allows the creditor to collect money from you indefinitely. Some of the ways that they can obtain this money is by a wage garnishment, levy your bank account, or put liens against your property or social security number so that in the future if you ever own any of these assets, they can attach to them in the future. It does get to be very unpleasant.
A bankruptcy, however, can get rid of the lawsuit as well as the debt. Once the bankruptcy has been filed, the creditor is no longer able to continue to pursue you in court and the lawsuit stops. Then when the bankruptcy is completed the debt is gone and so is the lawsuit. That is two birds in one fell swoop. If you have a situation like this please contact The Law Office of Eddy Hsu and we will be able to give you a free consultation to discuss the best options for you. We have offices in San Jose, San Mateo, and San Francisco. We look forward to speaking with you soon!