Can I Be Sued If I Declare Bankruptcy: Automatic Stay Protection Guide
The automatic stay stops most lawsuits cold the moment you file bankruptcy. Creditors cannot sue you, continue existing lawsuits, or take any collection action while your bankruptcy is pending. But the protection is not absolute. Some lawsuits can continue, and once your bankruptcy ends, certain creditors may resume litigation.
Understanding when you are protected and when you are not helps you navigate the intersection of bankruptcy and civil litigation. The rules are more nuanced than most people realize. Here is how bankruptcy affects lawsuits against you, both during and after your case.
Lawsuit Protection Overview
| Lawsuit Type | During Bankruptcy | After Discharge |
|---|---|---|
| Credit card collection | Stopped completely | Cannot resume - debt discharged |
| Medical bill lawsuit | Stopped completely | Cannot resume - debt discharged |
| Child support enforcement | Continues | Continues - not dischargeable |
| Criminal prosecution | Continues | Continues - not affected |
| Fraud determination | May continue in court | Can resume if debt not discharged |
| Personal injury lawsuit | Usually stopped | Can resume for non-dischargeable portion |
The Automatic Stay Provides Immediate Protection
The automatic stay under Section 362 of the Bankruptcy Code is one of bankruptcy's most powerful protections. It takes effect instantly when your petition is filed, without any court order or creditor notification required. The mere act of filing bankruptcy creates the stay.
Creditors must immediately stop all collection activity. Lawsuits pending against you are frozen in place. New lawsuits cannot be filed. Garnishments stop. Foreclosures halt. Repossessions become illegal. The stay creates breathing room to address your debts through bankruptcy rather than fighting creditors individually.
Violating the automatic stay exposes creditors to sanctions. If a creditor continues collection activity after learning of your bankruptcy, you can seek damages for the violation. Some courts award actual damages, attorney fees, and even punitive damages for willful violations.
The stay applies to almost all civil litigation involving debt collection. Contract disputes, collection lawsuits, foreclosure proceedings, repossession actions, and similar cases all stop. Creditors who want to proceed must ask the bankruptcy court for relief from stay, which requires showing cause.
What the Automatic Stay Does Not Stop
Despite its broad reach, the automatic stay has exceptions. Certain proceedings continue regardless of your bankruptcy filing because Congress determined other interests outweigh debtor protection.
Criminal proceedings continue without interruption. Bankruptcy does not stop prosecution, and you cannot use bankruptcy to avoid criminal accountability. If charges are pending against you, they proceed on their normal schedule.
Child support and alimony collection continues during bankruptcy. The stay does not protect you from domestic support enforcement. Wage garnishment for support can continue. Contempt proceedings for non-payment can continue. This exception reflects the priority Congress places on supporting children and former spouses.
Government regulatory actions generally continue. If a government agency is pursuing you for violations of law, bankruptcy typically does not stop them. Environmental enforcement, securities violations, and similar regulatory matters proceed. Tax audits can continue even though tax collection stops.
Relief From Stay Motions
Creditors can ask the bankruptcy court to lift the automatic stay and allow proceedings to continue. These motions for relief from stay require showing cause, but courts grant them in certain circumstances. Secured creditors seeking to repossess collateral often receive relief from stay if you are not making payments and have no equity in the property.
Lawsuits After Your Bankruptcy Ends
Once your bankruptcy case closes, the stay ends and creditors can theoretically resume litigation. But if their debts were discharged, they have nothing to collect. The discharge injunction permanently prohibits collection of discharged debts.
Creditors whose debts were discharged cannot sue you for those obligations ever again. The discharge is permanent and absolute for discharged debts. Attempting to collect a discharged debt violates the discharge injunction and exposes the creditor to sanctions.
Creditors whose debts survived bankruptcy can resume collection, including litigation. If you had non-dischargeable debts like student loans, recent taxes, or fraud-based obligations, those creditors can sue you after your case closes.
New debts incurred after filing are not affected by your bankruptcy discharge. If you run up credit card debt after filing, those creditors can sue you like any other creditor. Bankruptcy only addresses debts existing when you filed.
Determining Discharge in Bankruptcy Court
Sometimes creditors dispute whether their debt should be discharged. These disputes play out through adversary proceedings, which are lawsuits within your bankruptcy case. The bankruptcy court, not state court, decides discharge questions.
Creditors claiming fraud must file adversary proceedings within 60 days of your first 341 meeting. Missing this deadline usually results in discharge even if the debt was arguably fraudulent. Deadlines matter enormously.
If a creditor timely files an adversary proceeding, you will litigate whether that specific debt should be discharged. You might have an otherwise successful bankruptcy while one creditor fights about their particular debt. Prevailing in an adversary proceeding means the debt is discharged despite the creditor's objection.
Personal Injury and Wrongful Death Claims
Lawsuits for personal injury or wrongful death that you caused present special complications. The lawsuit may be stayed during bankruptcy, but the underlying claim might survive discharge depending on circumstances.
Negligent injury claims can usually be discharged. If you caused a car accident through ordinary negligence, resulting damages are typically dischargeable. The injured person becomes an unsecured creditor who may receive cents on the dollar or nothing.
Willful and malicious injury cannot be discharged. If you intentionally hurt someone, that judgment survives bankruptcy. DUI-related injury claims cannot be discharged regardless of intent. Congress specifically made debts for death or personal injury caused by operating a vehicle while intoxicated non-dischargeable.
Insurance coverage complicates the analysis. If insurance covers the claim, the lawsuit is really against the insurance company, and your bankruptcy has limited impact. The injured person collects from insurance regardless of your bankruptcy status.
Frequently Asked Questions
Can a creditor sue me the day after I file bankruptcy?
No. The automatic stay takes effect immediately upon filing and stops all collection lawsuits against you.
What if someone sues me for something that happened before bankruptcy?
If you listed the debt and it was dischargeable, the lawsuit cannot proceed after discharge.
Can my landlord evict me during bankruptcy?
Eviction proceedings have special rules. Pre-bankruptcy eviction judgments may proceed; new evictions for non-payment may be stayed temporarily.
Does bankruptcy stop divorce proceedings?
No. Divorce itself continues, though property division may be affected by bankruptcy.
Can someone sue me for debts after discharge?
Only for non-dischargeable debts. Discharged debts cannot be collected through lawsuits or any other means.
Updated 2026-01-11