David M. Siegel answers in 31 seconds. Watch on YouTube · Read the transcript.
Short answer: Yes — and a pending lawsuit is one of the better reasons to file. Whether you have been threatened with a suit, already been served, or have a garnishment running on a judgment, Chapter 7 can stop it immediately.
Being sued is a reason to file, not a bar to filing
People sometimes assume that once a creditor has gone to court, the window has closed. The opposite is true. A lawsuit is one of the most common reasons people end up filing, and it is a reason to move rather than wait.
The stay reaches every stage of the process. A suit that has been filed but not tried, a hearing on the calendar, a judgment already entered, a garnishment running against a paycheck — all of it stops when the case is filed.
There is still a deadline
Stopping a lawsuit is straightforward. Undoing what a judgment has already produced is harder, and once a judgment attaches as a lien against real estate you own, more work is required to deal with it.
So the practical answer is that you have time, but not unlimited time. A summons with a court date on it is worth a phone call the same week rather than the following month.
If a garnishment has already started
A garnishment usually comes from a judgment on an old credit card or medical bill, and it takes a chunk of every paycheck until it is satisfied. Filing stops it, and money taken shortly before the filing can sometimes be recovered depending on the amount and the timing.
That last part is worth asking about specifically. People often assume anything already taken is gone.
What you should not do
Ignoring a summons is the worst option. If you do not respond, the creditor gets a default judgment, and a judgment is far more powerful than the underlying debt — it enables garnishment, bank levies and liens.
The debt that produced the lawsuit is almost always dischargeable. It is only the procedural clock that punishes waiting.
Have a court date or a garnishment already running?
The consultation is free and there is no obligation. You will find out what you qualify for, which debts can be eliminated, what it costs, and what the payment plan looks like.
Wheeling: (847) 520-8100 Chicago: (773) 276-6969
Your case is handled by phone — you do not need to come into either office. Even the meeting of creditors is held on Zoom. We represent clients across the Northern District of Illinois: Cook, DuPage, Grundy, Kane, Kendall, Lake, LaSalle and Will counties.
Full transcript of the video
can I file if I’m being sued yes definitely you can file if you’re being sued that’s really one of the reasons why someone would file they either have a lawsuit pending or they’re currently being garnished or they’re being threatened with a lawsuit so yeah definitely you want to file a bankruptcy if you’re either being threatened with a lawsuit or if a suit is already filed we can often stop it immediately under Chapter 7 and if there’s a current garnishment going on as a result of a judgment from a lawsuit the Chapter 7 bankruptcy will stop the garnishment dead in its tracks
Related questions
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About the author. David M. Siegel has represented consumer bankruptcy clients in the Northern District of Illinois since 1991 and is the author of several books on consumer bankruptcy. The firm has offices at 790 Chaddick Drive, Wheeling, IL 60090 and 10540 S. Western Ave, Suite 202, Chicago, IL 60643, and handles cases by phone for clients throughout the Chicago area.
This article is general information about Illinois and federal bankruptcy law. It is not legal advice, and reading it does not create an attorney-client relationship. Every case turns on its own facts — speak with an attorney about yours.