If you’ve been sued (especially for a debt), you're likely trying to figure out if it makes more sense to defend the lawsuit or file for bankruptcy and wipe it all out. Here’s how to think through it.
Ask yourself the following questions:
- Is this just one lawsuit…or are you drowning in debt?
- If it’s just one creditor (e.g., a credit card company or medical provider), and you don’t have much other debt, it might be worth fighting or settling the lawsuit.
- If the lawsuit is just one of many debts, you can’t keep up with, bankruptcy could give you a clean break and stop all the lawsuits and collections.
- You owe more than you can realistically pay
- You’re being sued by multiple creditors
- Your wages are being garnished or frozen
- You're behind on mortgage, rent, or car payments
- How much is the creditor suing you for?
- If it’s a small debt (a few thousand dollars) and you can afford to pay or settle, fighting might make sense.
- If it’s a large amount, or there’s interest and legal fees piling up, bankruptcy could be a faster, cheaper solution.
- Do you have a good legal defense?
- The debt is too old (past the statute of limitations)
- The wrong entity is suing you (e.g., a debt buyer with no paperwork)
- You never borrowed the money (identity theft or mistaken identity)
- The amount is incorrect or includes illegal fees
- What can they take if they win?
- Bank accounts (unless you are Head of Household)
- Paychecks (via garnishment)
- Some real or personal property (if not protected under Florida exemptions)
- Can you afford a lawyer, or afford to lose?
- Immediately stops lawsuits and collections (thanks to the automatic stay)
- Can wipe out most debts (Chapter 7)
- Or help you create a repayment plan (Chapter 13)
Bankruptcy is usually better if:
Bankruptcy can wipe out judgments, stop wage garnishments, and give you a fresh start, but only if you qualify and file before certain court actions take place (like a lien on your property).
Some people do have valid reasons to fight a debt lawsuit:
If any of these apply, you might be able to win the case or settle for less, even without bankruptcy.
Even if a creditor wins a lawsuit, they can only collect from non-exempt assets like:
Florida actually has strong protections for your home (homestead exemption) and certain personal property, so if you don’t have many collectible assets, even losing the lawsuit might not hurt you much.
Defending a lawsuit takes time, energy, and possibly attorney fees. If you lose, you’ll end up with a judgment against you, possibly garnishment, and more debt.
Bankruptcy, by contrast:
Real-Life Example
Let’s say you're a single parent in Orlando being sued for $15,000 in credit card debt. You’re already behind on rent, utilities, and other cards. Even if you beat this one case, you're still drowning in bills. In that case, bankruptcy could eliminate all your unsecured debts, stop the lawsuit, and give you breathing room. You don’t have to fight each fire one at a time, you can extinguish them all at once.
What’s the Bottom Line?
| Situation | Best Option |
|---|---|
| Only one small lawsuit and you can pay or settle | Defend the lawsuit |
| You have multiple debts and can’t keep up | File for bankruptcy |
| You have strong legal defenses | Defend the lawsuit |
| You’re facing wage garnishment or asset seizure | File for bankruptcy ASAP |
| You want to protect your home or car | Bankruptcy can help with that |
Need Help Deciding?
The Dellutri Law Group offers free consultations, and they’re experts at both defending lawsuits and filing bankruptcy. That means they won’t push you one way or the other, they’ll help you choose what’s best for you. With Florida-wide representation and over 1,200 five-star reviews, they’ve helped thousands of people make smart, stress-free decisions in situations just like this.