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CHATTANOOGA, TN, July 31, 2014 /24-7PressRelease/ -- The Chattanooga bankruptcy attorneys at Clark & Washington wish to inform the public of the connection between filing for bankruptcy and the impact it could have on a lawsuit.
If a creditor files a lawsuit against you, you need to speak with an experienced bankruptcy attorney as soon as possible. There are many reasons why a creditor can file a lawsuit against you, including failing to pay your bills or fraud. Failing to respond to a lawsuit with an allegation such as fraud can have detrimental effects for your bankruptcy.
Typically, if you file for bankruptcy before your court date stemming from a filed lawsuit or after a judgment has been entered against you, your bankruptcy will erase the debt and the judgement against you, provided the debt is one that is dischargeable. This occurs because once you file for bankruptcy, you are protected by an automatic stay.
An automatic stay is an injunction that prevents any creditors from collecting debts from an individual that has declared bankruptcy. The automatic stay goes into effect as soon as you file for bankruptcy. However, the injunction that is imposed by an automatic stay is not absolute -- it excludes certain forms of debt such as child support and debts owed to government agencies for fines. Moreover, if you fail to respond to a complaint filed by a creditor, the court can issue a default judgment against you. This means that it will be assumed that you admit to the allegations in the complaint. If fraud happens to be one of causes of action, the creditor will be given a judgment for damages based on fraud, and damages for fraud are not dischargeable in bankruptcy.
For more information on filing for bankruptcy after being served with a lawsuit, visit http://www.chattanooga-bankruptcy-attorney.com.
About Clark & Washington:
Established in 1983, Clark & Washington is now one of the leading bankruptcy filers in the Southeast. They have locations in Georgia, Florida and Tennessee. Clark & Washington specializes in personal chapter seven and 13 bankruptcy. They offer honest, helpful legal advice to those experiencing financial hardships.
For more information, visit http://www.Chattanooga-bankruptcy-attorney.com.
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