Legal Definitions - suggestion of bankruptcy

Definition: A suggestion of bankruptcy is a legal document filed by a party in a court case to inform the court that they have filed for bankruptcy. This document also notifies the court that, due to the automatic stay provided by the bankruptcy laws, the court cannot take any further action in the case.

Example: John is involved in a lawsuit with his former business partner. However, John has recently filed for bankruptcy. He files a suggestion of bankruptcy with the court, informing them of his bankruptcy filing and the automatic stay that is now in effect. The court will then halt any further action in the case until the bankruptcy proceedings are resolved.

Another Example: Sarah is being sued by a creditor for unpaid debts. She files for bankruptcy and submits a suggestion of bankruptcy to the court handling her case. The court will then stop any further action in the case until the bankruptcy proceedings are completed.

These examples illustrate how a suggestion of bankruptcy is used to inform the court of a bankruptcy filing and the automatic stay that is in effect. This document is important because it prevents the court from taking any further action in the case until the bankruptcy proceedings are resolved.