The bankruptcy process can have a significant impact on businesses and individuals, affecting many aspects of business operations and a person’s life. However, there are unique issues to consider, such as legal action and how a lawsuit may be affected by bankruptcy. If you run a business and have filed for bankruptcy, it is important to understand how a pending lawsuit, as well as future litigation, could be affected by this move.
In some instances, people are not able to successfully file suit against a business that has filed a bankruptcy petition. On the other hand, if you are a business owner, just because you file for bankruptcy this does not necessarily mean that your firm will be protected against lawsuits. Ultimately, it will depend on the type of bankruptcy that you have pursued and the nature of the claim against your business.
Sometimes, the bankruptcy process allows business owners to not only erase debts but discharge pending lawsuits as well. This is not true in all cases though, since some claims are able to remain in place following a business’ bankruptcy. This can be a very complex and confusing topic to work through, and many business owners feel overwhelmed and unsure of their rights and options. During this time, it is important to move forward cautiously and ensure that all options (as well as the potential impact of certain decisions) have been explored and are clearly understood. If you would like to read more related to this area of law, take some time to explore other parts of our website.