Automatic Stay Protection

• The court places an automatic stay on pending credit actions when a corporation files for Chapter 11 bankruptcy protection. No creditor or consumer may legally pursue the corporation while the bankruptcy is in process. This includes you if the action you are suing for occurred prior to the company's filing for bankruptcy. Even worker's compensation claims, personal injury lawsuits and discrimination lawsuits are on hold until the company emerges from bankruptcy, at which time the automatic stay lifts.
  
  

Petition for Relief

• You may petition the bankruptcy court for relief from the automatic stay on the grounds of company fraud or significant financial loss should the stay remain in place. Your lawsuit may proceed as normal if the court grants your request and lifts the automatic stay. It is unlikely the court will lift the stay simply to allow you to pursue a lawsuit unless you are pursuing the corporation for a fixed debt amount and not simply looking for a settlement by jury.
  
  

Filing a Bankruptcy Claim

• A bankruptcy claim makes the court aware of your intent to pursue the corporation for a debt owed. The Court of Clerk's Office receives these petitions and groups debts according to type. A civil lawsuit, regardless of type, is usually grouped with a corporation's unsecured creditors, meaning you receive payment last because you take the most risk. Use this option only if the statute of limitations on filing your lawsuit is running out and you risk losing your legal right to collect any damages from the corporation.
  
  

Inclusion in Restructuring

• A corporation may elect to include your lawsuit in its restructuring plan. This means the corporation anticipates owing you money and is setting aside a portion of its assets to make payments to you. The final determination on the exact payment amount is contingent on the result of your lawsuit. Inclusion in a Chapter 11 restructuring provides you with the most secure means of receiving payment. Since the corporation included your lawsuit in its plan, failure to pay the claim could result in dismissal of the entire bankruptcy filing.