Bankruptcy offers protection from lawsuits
As some Atlanta readers already know, bankruptcy can offer protection from civil lawsuits. A recent bankruptcy filing by former criminal defendant Casey Anthony will likely take advantage of that benefit, since Ms. Anthony remains the subject of some current and possible civil lawsuits related to the criminal charges that she was acquitted of in 2011.
By filing for bankruptcy, Ms. Anthony will be able to take advantage of the automatic stay which prevents people or companies from seeking new judgments against someone who has filed for bankruptcy protection.
She will also be able to discharge some or all of the debt that she is in because of the costs of her lawsuit. Ms. Anthony did not utilize public defenders to obtain free legal counsel during the trial, but opted instead to engage her own attorneys, which came at a significant expense. Out of the total of just under $800,000 of debt that Ms. Anthony is carrying, $500,000 are in attorney’s fees. There are also collateral costs associated with the trial as well, including about $200,000 in court costs and investigative fees. She also owes money to the Internal Revenue Service for unpaid taxes and penalties. In total, Ms. Anthony lists 80 creditors in the filing.
While this is clearly an unusual case with a very high profile person, the fact is that many Georgia residents struggle to pay off all of their debt after a lawsuit or criminal matter takes them away from work and racks up legal costs. Being the subject of a criminal investigation is also harmful to one’s reputation, making it harder to find work to pay off debts after the case is over.
Typically when someone filing for bankruptcy is unemployed, the court will supervise a sale of their assets (like a home) to satisfy a portion of debts. In this case, Ms. Anthony lists very few assets aside from personal belongings like clothing and a laptop, so there may not be anything for debtors to access to satisfy the debt if she remains unemployed.
Source: CBS News, “Casey Anthony files for bankruptcy in Florida, court records say,” Jan. 28, 2013.
More information about how bankruptcy can stop lawsuits can be found on our website.
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