Summary: If you have a pending lawsuit or judgment against you from a creditor, bankruptcy may be able to help. Bankruptcy stops lawsuits and voids most judgments. It cannot void some liens or seizures if the suit goes to judgment.

Have You Been Sued in a Debt Lawsuit? Do You Have a Judgment Against You?

Perhaps considered the “worst-case scenario” for most people, being sued by a creditor is stressful, costly, and embarrassing. Getting served with paperwork starts a process that moves quickly if the creditor is aggressive. Defending or settling the lawsuit is urgent. Please don’t ignore it. If you have honest defenses to the lawsuit like you don’t owe the money, already paid and others, defending the suit may be a realistic option. Sometimes, filing bankruptcy is a better option. If you have a pending lawsuit or judgment, talk with an experienced bankruptcy attorney for help in determining how to proceed. If you have other debt, bankruptcy may be a fast, affordable way to clean everything up and start over.

When You Have Been Sued

A lawsuit often forces people to hire an attorney to either for the lawsuit or to file bankruptcy. Once served with suit papers, you must answer the lawsuit. If you don’t answer, a judgment will be entered. Consulting an attorney to determine your defenses is critical. People who cannot afford an attorney may be able to get assistance through a legal services organization. provides a list of resources to contact if you cannot afford legal representation.

Defenses to Lawsuit

If you have a valid defense to a lawsuit, hire an attorney to assist in raising those defenses. There are many defenses. Here are some examples:

  1. Statute of limitations – In general, the statute of limitations on most debts in Texas is four years.
  2. Debt previously satisfied – If an old debt was settled and paid. It could have been sold to a debt buyer.
  3. Charges not accurate
  4. Other defenses – Texas Law Help offers a great overview of affirmative defenses.

Settling a Debt Lawsuit

Settling a lawsuit may be possible. Watch out for ripoff debt settlement companies. Use an attorney or settle it yourself.

Important to Not Let Judgment Be Entered

Once the creditor suing takes a judgment, your bank account could be frozen. Other assets could be seized. Some assets can’t usually be seized, such as your home. But the judgment can be enrolled in the land records clouding the title. Bankruptcy stops lawsuits and voids most judgments. But even bankruptcy can’t void some liens and seizures if you let the suit go to judgment.

Bankruptcy stops garnishments and levies. In Texas, in most circumstances, the judgment creditor cannot take your homestead until you die; however, the judgment still attaches to your property. The judgment may cloud your title and interfere with refinancing or sale of the property. There is a procedure available for removing the judgment lien from a homestead outside of bankruptcy. If you still owe the judgment, though, the creditor could monitor your finances. You usually have 6 months to spend the money on a new home.


National Consumer Law Association offers a series of educational videos on what to do if you are sued.

TexasLawHelp has forms available for DIY’ers.

Toolkit: My Debt Collection Rights in Texas

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