Lawsuit, What If One Was Filed Before The Bankruptcy Case Was Filed?

A Debtor and a Creditor are Often Involved in Lawsuits before a Bankruptcy Case is Filed – Generally, a lawsuit commenced before the bankruptcy case was filed must stop unless the bankruptcy judge gives permission for it to continue. In other situations the lawsuit is replaced by a creditor filing a "proof of claim" in the bankruptcy case, or the lawsuit may be removed from the non-bankruptcy court to the bankruptcy court. If a debtor is a plaintiff in a lawsuit, the trustee and court must immediately be notified to determine if that lawsuit can continue or must be brought into the bankruptcy court. In chapter 7 and 11 bankruptcy cases in which a trustee is appointed, the trustee generally becomes the new plaintiff if the debtor was the plaintiff at the time the bankruptcy case was filed.

FAQ Type: 
After Filing Bankruptcy