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Upcoming Lawsuit Court Appearance and Bankruptcy

I have my first court appearance this March as I’m being sued for an at-fault car accident which the defendant is claiming 1 million dollars in damages for.

About a month ago after speaking to a lawyer and Licensed Insolvency Trustee I was initially told if I file for bankruptcy (due to unrelated debts unpaid) before the court appearance I would not be liable for the defendants claim.

I just got back from speaking to my trustee and they told me I can only file for bankruptcy AFTER a judgement has been made at the court appearance.

I thought I could file for bankruptcy to close this lawsuit against me as I have absolutely no money or assets and I’m already owing. What happened?

Posted from: Ontario

One Response to “Upcoming Lawsuit Court Appearance and Bankruptcy”

A licensed trustee said...

When you file for bankruptcy legal actions against you are “stayed” automatically – that means they are put on hold. The person/company suing you has the right to ask the Bankruptcy Court for the right to carry-on with their lawsuit after you file – you have the right to argue that they should not. If they get permission to carry-on and obtain a Judgment against you they then have to apply to the Court to ask that the Judgment be excluded from your bankruptcy – there is a very specific list of things that may be excluded (your lawyer or trustee should review the list with you).

So, whether or not you need to be concerned depends on the nature of the lawsuit and whether or not at the end of the day the Judgment is for something that can be excluded from bankruptcy.