How do your proclaim to the debt collection world that you are now protected by an automatic stay from the bankruptcy court? Your first step should be a suggestion of bankruptcy. This is a device you will use for legal proceedings such as:
A Suggestion of bankruptcy is a legal document you file to let the court and the attorney for the party suing you that there is an automatic stay. This is not a notice of filing. The notice is an entry of appearance in the case. In English that means that you have acknowledged jurisdiction of the court over you in the case, and you will then be responsible for mounting a defense if the stay is somehow dissolved.
As a friend of the court, you are just informing them that there is a bankruptcy. This is an important distinction for a law suit if which you have not yet been served with legal process by the following means:
- Certified mail
- Regular mail
- Personal service
- Residence service
If you have not yet been served with the summons, the suggestion is likewise not an appearance and the result is that you are not subjecting yourself to the jurisdiction of the court by filing it.
The effect of the suggestion of bankruptcy is to normally stop the litigation in its tracks. It does not actually stop the court from anything, but it is a roadblock for the opposing parties. If the court acts in any way against your or your assets at the request of the opposing party with knowledge of the stay, they will be answerable for damages and your attorney fees for enforcement.
In my experience the collection law firms in Northeast Ohio will dismiss pending civil collection cases when confronted with a suggestion of filing. Another miraculous impact happens in garnishment and bank attachment situations. When the money is taken it goes to the court on the way to the judgment creditor. Filing the suggestion while the money is still with the clerk of court will often result in the judge ordering its return to you.
Choosing the right attorney for the job is crucial on this point. Many lawyers will not take the extra steps to stop lawsuits and judgments because they run cut rate operations. Non-bankruptcy attorneys normally don’t understand the mechanics of the suggestion. When you have judgments, litigation, garnishment, or attachments pending you need an attorney who knows how to stop the cases, who agrees to do so, and who addresses the suggestion of bankruptcy in the retainer agreement.