What to do bout bankruptcy and a lawsuit?

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What to do bout bankruptcy and a lawsuit?

I am involved in a lawsuit. Under a stipulation I was order to pay money into an escrow account until the case recontinues. I didn’t do it. I am now filing for bankruptcy. I assume a stay will take place on the day I file. Will this absolve me of the court order and a possible contempt of court ruling? Also, will it affect my discharge?

Asked on June 27, 2012 under Bankruptcy Law, Massachusetts

Answers:

FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 8 years ago | Contributor

If you failed to comply with a state court order concerning a stipulation to pay money owed your creditor, your bankruptcy filing will stay all state court proceedings against you including any quasi-criminal matters such as the contempt matter you have written about.

The state court contempt matter will have no effect on your intended debt discharge in bankruptcy court. Assuming you get your debts discharged including the one that the contempt proceeding may arise from, the contempt proceeding most likely will go by the wayside.


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