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225 Dolson Avenue, Suite 303 | Middletown, New York 10940
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When You Get Sued For Post-Filing Debt in 13

The automatic stay of Bankruptcy Code section 362(a)(1) prohibits:

“The commencement or continuation, including the issuance or employment of process, of a judicial, administrative, or other action of proceeding against the debtor that was or could have been commenced before the commencement of the case under this title, or to recover a claim against the debtor that arose before the commencement of the case under this title;”

So what happens when you’re a debtor in chapter 13, a claim arises after the commencement (filing) of the case, and you get sued on that claim?

The lawsuit proceeds to judgment, but the judgment cannot be filed, or collected, without violating some of the automatic stay’s remaining provisions, namely 362(a)(3) and/or (a)(4).  Subsection (a)(3) prohibits acts to obtain possession of property of the estate or to exercise control over that property, while subsection (a)(4) prohibits acts to create, perfect or enforce any lien against property of the estate. And just about everything in a chapter 13 is property of the estate, including your bank balance and your earnings from business or employment.

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    225 Dolson Avenue
    Suite 303
    Middletown, New York 10940
    Phone: 845-343-6227
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