One of the biggest worries someone may have if they need bankruptcy law services while working through other legal matters is how the two situations might affect each other. Fortunately, bankruptcy law is written with most of these sorts of concerns in mind. Let's take a look at what might happen in four different situations.
Garnishments
Most garnishments are halted if you file for Chapter 7 or 13 bankruptcy. Notably, past-due child support and alimony garnishments will not be stopped under Chapter 7, but they may be halted under Chapter 13. Be aware, however, that a Chapter 13 repayment plan is a promise to pay up according to the plan, and that may accelerate the payment process in some cases.
Similarly, most garnishments for student loans will continue. The exception is if you can prove extreme hardship.
Lawsuit Settlements and Judgments
If you are the recipient of a settlement or judgment, it might be protected during bankruptcy. Conversely, folks who've been ordered to pay may request that the court order halt payments. This is because the person who sued you becomes a creditor upon the conclusion of the case.
Things get trickier if you're in the process of being sued while you're also petitioning for bankruptcy relief. A judge assigned to the suit may order that it can continue in the interest of justice. It may be better under such circumstances to delay filing for bankruptcy until the case is concluded.
Criminal Penalties
In cases involving criminal penalties, it depends on the type of bankruptcy you file for. Under Chapter 7, fines are not discharged. However, you may be able to restructure them as outstanding debts under Chapter 13.
Some reimbursements ordered by the court may be dischargeable. This usually involves payments that weren't intended as punishment. For example, the city might have received reimbursement for cleaning up a wall that was tagged. This debt can be discharged.
Matters Not Involving Money
As a general rule, a legal issue that doesn't involve money will proceed even if you've retained bankruptcy attorney services and gotten a stay. The bankruptcy court, however, may provide you with a scheduling excuse in other cases. You'll need to inform both of the courts of what your situation is, and arrangements will then be made accordingly to make sure you can attend hearings on both dockets. Do not abuse this to get out of things, though, or one of the judges may come down on you.
