Can I file bankruptcy and include a debt from a company that has filed to take me to court?

I live in one stae and am being sued in another, where I used to live and where my business was located that accrued this debt. I am being taken to civil small claims court for $1400, this includes court costs. It goes to pre-trial in 2 weeks. I was thinking about filing bankruptcy before, and now that I’m being sued I really want to file. Can I include this lawsuit in my bankruptcy or it too late because they have already filed with the court to sue me?

Asked on August 1, 2012 under Bankruptcy Law, Iowa


Terence Fenelon / Law Offices of Terence Fenelon

Answered 8 years ago | Contributor

You can file for relief under the bankruptcy code regardless of the status of the collection of the debt.  Upon filing, the Bk Court will issue the automatic stay which will stop the civil proceeding.  Assuming that the bankruptcy is granted, the case in the civil court would have to be dismissed and you would be discharged of liability.

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