Bankruptcy

I Got Sued By the Chase Bank on the Second Mortgage Default; Is Bankruptcy the Solution? Can Bankruptcy Help Me with the Bank Lawsuit in Arizona?

By Joseph McDaniel, Esq.

Probably.

Bankruptcy is all about the process whereby the honest debtor gets a discharge in a bankruptcy proceeding, whether it's a Chapter 7 bankruptcy or a Chapter 13 bankruptcy.

In fact, it will almost seem that the bankruptcy was designed to help you deal with the bank lawsuit once you have filed.

See, the second you file, the automatic stay kicks into effect, and the bank is stopped on a dime. In an instant. In its tracks.

Then, assuming that you've done your consumer credit counseling both before and after you file, and you passed the means test, and you gave the trustee what he wanted when he sent you the trustee letter, and you attended your first meeting of creditors, and there were no complaints by creditors filed in your case, you get to Bankruptcy Discharge City!

Which, all things considered, is probably a good place to be in a depression, so that when you do find a job, you get to keep what you make without being garnished, subjected to debtor's exams, and similar creditor torture techniques.

I much prefer it if my clients don't let lawsuits turn into judgments, because that can complicate their bankruptcy a bit, because a judgment that is recorded in the county in which the debtor owns real property becomes a judgment lien on real property owned by the debtor in that county (like Maricopa County, you know?).

But whether you're being sued by Chase Bank, or sued by Bank of America, or sued by CitiBank for a credit card, or sued by J.P. Morgan Chase, or Capital One, or M&I Bank on a second mortgage after a short sale, the fundamental debtor protections found in a Chapter 7 or a Chapter 13 are very useful indeed.

Now, I don't want anybody to think about filing a bankruptcy, which is a pain in the neck and a serious decision, for a lawsuit on a credit card for $300.

Unless there's one coming right behind it for $30,000. And then a big lawsuit.

NOTHING HERE CONSTITUTES LEGAL ADVICE RE A CHAPTER 7, CHAPTER 13, CHAPTER 11, OR CHAPTER 12. FIND AN ARIZONA BANKRUPTCY LAWYER WHO IS BOARD CERTIFIED IN BANKRUPTCY LAW, AV RATED, AVVO 10 RATED, ON SUPERLAWYERS, OR JUST VERY EXPERIENCED AND A FORMER CHAIR OF SOME BANKRUPTCY SECTION OR COMMITTEE. NOTHING HERE MAY BE USED AS LEGAL ADVICE IN CONNECTION WITH ANY BANKRUPTCY, WHETHER THAT BANKRUPTCY IS IN PHOENIX, GLENDALE, TEMPE, MESA, SCOTTSDALE, OR ANYWHERE ELSE.

Full post as published by Arizona Bankruptcy Attorney Blog on May 28, 2010 (boomark / email).