Often times, the reason that a debtor will choose to file bankruptcy is because a creditor is suing them. Usually, it is a credit card that they have been unable to pay do to some unforeseen circumstance. Many debtors will also try to make payment arrangements with the creditor but are unable to do so either because they have too much income or too little.
If your creditor sues you the first thing that will happen is that you will receive a citation. This will be served upon you either by a sheriff or a process server. If the creditor is unable to serve you, they may also be able to get court permission to use an alternative service; by either posting the citation on the door or mailing it to you.
After you have been served you are only given a certain number days to file an answer. The standard answer deadline in Texas is the Tuesday following 20 days after the debtor was served. If the debtor doesn’t file an answer the creditor can get a default judgment, which is basically an automatic win for the creditor. If the debtor files an answer, then the creditor will either send discovery requests to the debtor to get more information, or set the case for trial and prove their case.
A judgment will allow the creditor to attempt to collect on their debt by attaching it to non-exempt property. Exempt property in Texas includes your homestead, your car, and personal items. Also, the Texas constitution prohibits a creditor from garnishing your wages, but they can attach the judgment to your bank account and garnish your money until the judgment is settled.
Filing for bankruptcy imposes an automatic stay, which will stop all collections. This includes a lawsuit. The filed suit will then discharge the debt that the creditor is attempting to collect. For more information on how to deal with a creditor who files a lawsuit and/or filing for bankruptcy, contact the experienced attorneys at Fears Nachawati Law Firm.