Can You Sue Someone Who Has Filed Chapter 13 Bankruptcy?

In most cases, you cannot sue someone who has filed Chapter 13 bankruptcy. The moment the petition is filed, a federal automatic stay freezes pending lawsuits and blocks new ones, along with nearly every other form of collection, for the three to five years the repayment plan runs. The important exceptions are criminal cases, most family law matters, tax audits, and claims tied to fraud or intentional harm. For everything else, your options run through the bankruptcy court itself.

How the Automatic Stay Shuts Down Lawsuits

Federal law imposes the automatic stay the instant a Chapter 13 petition is filed.¹ It applies to every creditor, whether or not you’ve been formally notified. A pending state or federal court case against the debtor stops where it stands. A lawsuit you were about to file cannot be filed. Even informal steps like demand letters, collection calls, or reporting the debt to a credit bureau as newly delinquent can cross the line.

The stay is a court order, not a courtesy. If you learn the debtor has filed, treat your file as frozen until you figure out whether an exception applies or you get court permission to move forward.

What It Costs to Violate the Stay

Anyone injured by a willful violation of the stay can recover actual damages, court costs, and attorney’s fees, and in serious cases punitive damages as well.¹ The Ninth Circuit held in In re Schwartz-Tallard that recoverable attorney’s fees include the cost of bringing the violation action itself, so the debtor can sue you for violating the stay and make you pay for that lawsuit too.²

“Willful” is a lower bar than it sounds. You don’t need to intend harm. You just need to know about the bankruptcy and take collection action anyway. Courts have found violations for continued automated billing, refusing to halt a foreclosure, and letting a garnishment keep running after notice. When in doubt, stop and ask a bankruptcy attorney.

Lawsuits the Stay Does Not Block

Several categories of legal action continue despite a Chapter 13 filing. If your dispute fits one of these, you may be able to proceed in the normal court without doing anything in the bankruptcy case.

Criminal Prosecutions

Criminal cases are entirely unaffected by a bankruptcy filing.¹ Fraud charges, embezzlement prosecutions, and every other criminal proceeding continue on their normal track. Criminal fines and restitution ordered as part of a sentence also survive the Chapter 13 discharge.³

Family Law Matters

The stay does not block actions to establish paternity, set or modify child support or alimony, resolve custody or visitation, finalize a divorce, or address domestic violence.⁴ Dividing property that belongs to the bankruptcy estate may be paused. Collecting a domestic support obligation from the debtor’s wages or other non-estate property continues uninterrupted.

Tax Audits and Assessments

The IRS and state tax agencies can audit the debtor, issue deficiency notices, and demand unfiled returns during the case.⁴ Active collection like bank levies and property seizures is generally stayed, but determining what the debtor owes is not.

The Codebtor Stay Catches Many Creditors Off Guard

Chapter 13 has a protection that Chapter 7 and Chapter 11 do not: the codebtor stay. If someone cosigned a consumer loan with the debtor, you generally cannot pursue the cosigner either while the case is open.⁵ Many creditors assume the cosigner is fair game because the cosigner did not file bankruptcy. The law says otherwise, at least temporarily.

The codebtor stay covers only consumer debts, meaning debts for personal, family, or household purposes. Business debts are not included. The stay also doesn’t apply if the cosigner actually received the benefit of the loan, or if the debtor’s plan doesn’t propose to pay the debt. In those situations, you can ask the bankruptcy court to lift the codebtor stay. When the request is based on the plan not covering the debt, the stay lifts automatically 20 days after the request unless the debtor or cosigner files a written objection.⁵ If an objection is filed, the court holds a hearing.

Asking the Bankruptcy Court to Lift the Stay

The automatic stay isn’t necessarily permanent. You can file a motion asking the court to lift or modify it. Courts grant relief in several situations:

For cause, including lack of adequate protection. If property securing your debt is losing value and the debtor isn’t making payments or otherwise protecting your interest, that is a common ground. A car depreciating while plan payments are missed is a classic example.
When the debtor has no equity in the property and the property isn’t necessary for the repayment plan to succeed.
When the filing was part of a scheme to delay or defraud creditors, particularly where real property transfers were made without the secured creditor’s consent or where serial bankruptcy filings are involved.

Motions for relief are filed with the bankruptcy court.¹ The debtor can oppose. If the court grants relief, you can resume your lawsuit or collection action, but only to the extent the court’s order allows. On an adequate-protection motion, the debtor may offer periodic cash payments, a replacement lien, or another equivalent arrangement to keep the stay in place.⁶

Suing Inside the Bankruptcy: Adversary Proceedings

Some disputes have to be resolved inside the bankruptcy case itself. An adversary proceeding is essentially a lawsuit filed in the bankruptcy, with its own complaint, discovery, motions, and trial, decided by the bankruptcy judge.⁷

Creditors most often use adversary proceedings to challenge whether a specific debt should be discharged. If you believe the debtor ran up charges through fraud, lied on a credit application, or caused you intentional harm, you generally cannot wait for the case to end and then sue. You need to raise dischargeability during the case, and the bankruptcy court decides whether that debt survives. The deadline for filing is short, so get a bankruptcy attorney involved early.

Moving an Existing Lawsuit Into Bankruptcy Court

If you already had a lawsuit pending when the Chapter 13 was filed, you may be able to remove it to the district court where it’s pending as a claim related to the bankruptcy case, rather than starting over.⁸ Removal isn’t available for Tax Court cases or for a government agency’s regulatory enforcement actions. The court can also send a removed case back on equitable grounds, such as when the dispute turns on state-law questions the state court is better suited to resolve.

Debts the Chapter 13 Discharge Will Not Wipe Out

Even if the debtor completes the plan, certain debts survive. If your claim falls in one of these categories, you can collect once the case ends, and in some situations you need to act during the case to protect that right.

Domestic support obligations. Child support and alimony are completely non-dischargeable.⁹ A Chapter 13 plan has to pay them in full, and the debtor cannot receive a discharge without certifying that support due through the certification date has been paid.³

Recent taxes. Priority tax claims survive and must be paid through the plan, including income taxes for which a return was due within three years before filing, taxes assessed within 240 days before filing, and taxes tied to returns the debtor never filed or filed late within two years of filing.¹⁰ A federal tax lien recorded before the filing remains attached to the property it covers; the discharge wipes out personal liability but not the lien.

Fraud. Debts obtained by false pretenses, misrepresentation, or actual fraud are not dischargeable.⁹ To block discharge, you usually have to file an adversary proceeding in the case and prove the fraud. Waiting until the case closes can cost you the right to challenge dischargeability.

Willful and malicious injury. Debts from intentional harm to a person or property are excepted from discharge.⁹ The standard is narrow: the debtor must have intended the act and either wanted the harm or known it was substantially certain. Ordinary negligence, gross negligence, and professional malpractice don’t qualify. Under the Chapter 13 completion discharge, debts for willful or malicious injury that caused personal injury or death also remain enforceable.³

Intoxicated driving injuries. If the debtor caused death or personal injury operating a vehicle, boat, or aircraft while legally intoxicated, that debt is not dischargeable, regardless of whether the incident led to criminal charges.⁹

Your Statute of Limitations Will Not Expire During the Stay

A common worry: if you can’t sue for three to five years, will your claim time out? Federal law covers this. If the deadline hadn’t expired before the bankruptcy was filed, it won’t expire until the later of its original date or 30 days after the stay ends.¹¹ You get at least a 30-day window after the stay lifts. This only works if the limitations period was still alive when the petition was filed; the bankruptcy does not revive an already time-barred claim.

File a Proof of Claim Even If You Cannot Sue

If a lawsuit is off the table, the main way to get paid is to file a proof of claim in the bankruptcy. This formal document tells the court and the trustee how much you are owed and what kind of debt it is. The trustee pays creditors based on filed claims, not on the debtor’s schedules. If you don’t file, you may receive nothing from the plan even though the debtor listed your debt.

Priority debts like recent taxes and domestic support are paid first. Secured debts are handled according to the plan’s treatment of the collateral. General unsecured creditors receive whatever is left, which can range from a meaningful percentage to almost nothing depending on the debtor’s income and expenses. The court sets a filing deadline, and missing it can cost you your share.

What Happens When the Case Ends

A Chapter 13 case ends in one of two ways, and your rights look very different in each.

Successful Completion

When the debtor finishes all plan payments and certifies that domestic support obligations are current, the court grants a discharge. The discharge eliminates personal liability for most debts covered by the plan and creates a permanent injunction against collecting them. Any judgment you previously obtained on a discharged debt is voided to the extent it determined personal liability.¹² The non-dischargeable categories above remain enforceable, and you can resume collection on those once the case closes.³

Dismissal

If the debtor stops making plan payments, violates the plan, or the case is dismissed for another reason, the stay evaporates and creditors regain all pre-bankruptcy collection rights. You can file suit, pursue garnishments, foreclose, and take any other action available under state and federal law. No debts are discharged, voided liens are reinstated, and property reverts to who held it before the case began.¹³ At that point, if your claim is still within its limitations period, the courtroom door is open again.

1
Office of the Law Revision Counsel. 11 USC 362 – Automatic Stay
2
United States Court of Appeals for the Ninth Circuit. In re Schwartz-Tallard
3
Office of the Law Revision Counsel. 11 USC 1328 – Discharge
4
Office of the Law Revision Counsel. 11 US Code 362 – Automatic Stay
5
Office of the Law Revision Counsel. 11 US Code 1301 – Stay of Action Against Codebtor
6
Office of the Law Revision Counsel. 11 US Code 361 – Adequate Protection
7
Legal Information Institute. Federal Rules of Bankruptcy Procedure Rule 7001 – Types of Adversary Proceedings
8
Office of the Law Revision Counsel. 28 US Code 1452 – Removal of Claims Related to Bankruptcy Cases
9
Office of the Law Revision Counsel. 11 US Code 523 – Exceptions to Discharge
10
Office of the Law Revision Counsel. 11 US Code 507 – Priorities
11
Office of the Law Revision Counsel. 11 US Code 108 – Extension of Time
12
Office of the Law Revision Counsel. 11 USC 524 – Effect of Discharge
13
Office of the Law Revision Counsel. 11 USC 349 – Effect of Dismissal