Report All Lawsuits

• As of May 2011, if you have pending litigation against anyone else, you must report it when you file for bankruptcy. The lawsuit then becomes part of your bankruptcy estate, and your trustee can opt to pursue the lawsuit if he so desires. If you do not report a lawsuit and then file it soon after bankruptcy, the court can dismiss your lawsuit because you did not report it as part of your bankruptcy estate.
  
  

Automatic Stay

• If anyone has litigation pending against you, when you file for bankruptcy the lawsuit is put on hold. This is called an automatic stay. The plaintiff may appeal to the court for permission to continue the lawsuit while the automatic stay is in effect if she wishes. After your bankruptcy case is processed, if the plaintiff has not successfully filed an objection to the automatic stay, the court usually dismisses the lawsuit.
  
  

Plaintiff's Options

• If a plaintiff in a particular case wants to pursue the lawsuit, he can object to the automatic stay. The plaintiff can ask for relief from the automatic stay, which allows him to continue the lawsuit in civil court or file an adversary proceeding, which allows him to continue the case in the bankruptcy court. Plaintiffs usually file an adversary proceeding if the court refuses to grant relief and the plaintiff wishes to continue the case so that there is a chance he will get some of his money back from the debtor.
  
  

Judgments

• If a creditor has already won a civil lawsuit against you, the judgment may be discharged as part of your bankruptcy case. List all judgments against you in your bankruptcy paperwork along with your other debts so that the judgments may become part of the bankruptcy estate and the bankruptcy court can consider discharging them or adding them to a structured repayment plan.