How JustAnswer Works:

  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.

Ask FiveStarLaw Your Own Question

FiveStarLaw
FiveStarLaw, Attorney
Category: Bankruptcy Law
Satisfied Customers: 36646
Experience:  Bankruptcy Lawyer. Experienced.
9968427
Type Your Bankruptcy Law Question Here...
FiveStarLaw is online now
A new question is answered every 9 seconds

We are leasing equipment from a party in Michigan who has filed

Customer Question

We are leasing equipment from a party in Michigan who has filed chapter 7 bankruptcy. Supposedly the equipment was free and clear when the leases were signed with our company. The leasing party is an individual and was in breach of contract all along because there were liens on the equipment.    the truck was paid off prior to the bankruptcy, howver, it became part of the bankruptcy estate (and we are now negotiating to purchase it), the trailer, however has a lien on it with wells fargo and they have made motion to lift the stay, which is their right.

The guy who filed the chapter 7 never disclosed to the bankruptcy court that there were our contracts and at lease 7 others out there. We are NOT part of the bankuptcy as creditors. Can I sue him for breach of contract on the trailer as we have made payments to him of over $12,000 in the last 12 months and Wells Fargo is going to repossess? I have an attorney, but this is a bit beyond his expertise. By the way we are located in MT
Submitted: 5 years ago.
Category: Bankruptcy Law
Expert:  mdmills75 replied 5 years ago.
You could sue him but it would be a waste of time unless he has a lot of assets being liquidated. Because your claims originated before the bankruptcy they will be considered discharged.
Customer: replied 5 years ago.
OK, so since he has the truck (which is in our possession), which we will want to purchase from the estate, would I be better off to file suit and go after the truck that is already in the estate? It would be just about equal value to the payments we have made on the trailer
Expert:  mdmills75 replied 5 years ago.
I'm going to opt out and see if I can find you an expert who is more familiar with commercial bankruptcy to help you. Please stand by.
Customer: replied 5 years ago.
The chapter 7 is an individual bankruptcy thanks for your help
Expert:  mdmills75 replied 5 years ago.
Yes, I mean commercial transactions like this in a Chap. 7. I'm going to clear this reply now so someone else can get in. Please hang on.
Expert:  ANDREA replied 5 years ago.

Good Afternoon,

 

Thank you for choosing JustAnswer. I will be glad to and help you. I have read your facts, your Replies and the experts comments and the only other thing I can add to answer your question is the following:

 

As you know the entity/person filing a Petition in Bankruptcy must list his creditors and persons to whom something is owed and file it with the Bankruptcy Court, so that they will be discharged in bankruptcy.

 

If the debtor fails to include someone on the list, then as to that person, it is as if the debtor never filed bankruptcy, what is owed remains against the debtor and he is liable.

 

Please press the GREEN "ACCEPT" button so that I may receive credit for helping you; this is the only way we receive credit. Leaving positive feedback, Bonus, etc., is always appreciated.

 

Thank you

 

ANDREA

 

Customer: replied 5 years ago.

But our attorney in MI has told us that we would need to file an adversary action and then possibly come out with nothing. If we could sue and get the truck out of the deal that would be fine, but this is causing me and my company a great deal of lost income and possibly causing us to go bankrupt through no fault of our own.

 

Are you a bankruptcy expert?

Expert:  FiveStarLaw replied 5 years ago.

Hello,

 

I can assist you. I am a bankruptcy expert with 20+ years experience.

 

Your attorney is correct. You would need to file an adversary in the bankruptcy proceeding. If you prevail in the adversary and obtain a judgment, that judgment would not be discharged in the bankruptcy. This means that the debtor would still owe you whatever money the court awarded. However, it would not result in you obtaining the truck.

 

So sorry.

Customer: replied 5 years ago.

Thanks for your answer. I have more questions but let me know when you will be next online as I realize this is a weekend and you may not be available. If an advisary proceeding was to be filed, given that it would not be discharged and he could not file even for a chapter 13 for 4(?) years would there be any property besides a homestead exemption that could not be executed against?

 

Better question...is there a way that I can be made a creditor? He did not list the contracts for myself and at least 10 others in the same position. I let the BK trustee know about my contracts as income and he had claimed only $1080 per month income and put us in a bad position. Had I not found out accidentially he would have put our company out of business.

If I can be made a creditor (after the fact?) due to the fact that I was NOT officially notified by the court (due to he just did not put us in there) would that give me any advantages?

I think that I will owe you more than the deposit $$$. But this may be the difference between survival and bankruptcy due to do fault of ours. Thanks

 

Your answers are probably worth more than my deposit thing and I am willing to pay for it

Expert:  FiveStarLaw replied 5 years ago.

Hello,

 

I have more questions but let me know when you will be next online as I realize this is a weekend and you may not be available.

I am actually on vacation. However your first expert contacted me and requested that I assist you. I will check back as I can throughout the day and respond to your questions.

 

 

If an advisary proceeding was to be filed, given that it would not be discharged and he could not file even for a chapter 13 for 4(?) years would there be any property besides a homestead exemption that could not be executed against?

If you prevail in the adversary, you will have a judgment. The judgment can be used to execute on any of the debtor's assets after the bankruptcy is closed. It would be as if the debtor did not file bankrupcy and you had a judgment to collect.

Better question...is there a way that I can be made a creditor? He did not list the contracts for myself and at least 10 others in the same position. I let the BK trustee know about my contracts as income and he had claimed only $1080 per month income and put us in a bad position. Had I not found out accidentially he would have put our company out of business.

You need to file a proof of claim form in the bankruptcy. Here is the form. Once the form is filed, you will be considered a creditor. This does not prevent you from also filing your adversary.

 

If I can be made a creditor (after the fact?) due to the fact that I was NOT officially notified by the court (due to he just did not put us in there) would that give me any advantages?

Unfortunately it would not give you any advantage.

I think that I will owe you more than the deposit $$$. But this may be the difference between survival and bankruptcy due to do fault of ours. ThanksYour answers are probably worth more than my deposit thing and I am willing to pay for it

The way the site works is that you accept each answer that is satisfactory. When you accept, you are charged the amount of your deposit. I receive half of the accept amount and 75% of the bonus money. Since you have many questions, you can accept each new answer or accept the first only and leave a bonus for the amount you want to pay for that question.

I will check back with you later.

Thank you.

FiveStarLaw, Attorney
Category: Bankruptcy Law
Satisfied Customers: 36646
Experience: Bankruptcy Lawyer. Experienced.
FiveStarLaw and other Bankruptcy Law Specialists are ready to help you
Customer: replied 5 years ago.

OK. Accepting this answer and will give bonus for the rest.

 

If I can file proof of claim (to make me a creditor) and file the adversary (and prevail which I am sure we would) what type of creditor would that make me? Secured, unsecured, priority? I ask this because I have made $11,400 in payments on the trailer which will be repossessed by his lender and this constitues breach of contract (although breach of contract was evident once we found out he had lien on the trailer). I have contracts with him on the truck and trailer which my guess is that the trustee did not want to keep. The loss of this trailer will cost me and my company a great deal of loss of revenue (and basically I will have no other choice other than to file a chapter 13 myself since this IS my income)

 

But I don't really see if this does me any good. I do not know how many other creditors he has or what he owes other than almost $400,000 worth of equipment that he sublet with liens on them. He has given everything back to the lenders except for this truck which was paid off in March, 09 and then the title was transfered 3 times and finally back to him and his sister in law (which were illegal transfers). I do believe however that this truck in question is the only asset in the estate therefore the only thing that could be sold to satisfy any debt. Since I need to purchase this truck and will be making an offer (which my atty says he believes the trustee will accept) would being a creditor be worthwhile. I am sure that I would win the adversary.

 

My atty in MI is going to present our offer for the truck which he has taken into the estate (we already have a deposit in his trust account for this), but according to him, the trustee could order the truck be put into storage and taken off the road until the decision is made on the sale, but he does not think that will happen (given my luck right now I would not want to make a bet!). This truck and trailer is our job; i.e. my income and economy.

 

And then there is the matter of $1050 paid to the attorney representing us in this proceeding....any recourse on that in the adversary? I am assuming that I will need to pay him more as he has already been to court twice (341 meetings) so the total may be more. I really feel sorry for the other guys that had contracts with him who did not find out about this and will have their trucks and trailers repossessed on them.

 

All the stays on equipment have been lifted as of 8/6/09 and the lender for the trailer will not be back into his office until the 12th. We are going to try and work a deal with them, however, I don't think my credit will be good enough for them (Wells Fargo).

 

Also, my atty in MI thinks that the trustee may have handed this case over to the US Bankruptcy Trustee for fraud (he left out a lot of stuff, income etc including my contracts with him and he tried to hide the truck we have). Does that help me at all?

 

Thanks for your time while on vacation, wish I had found you sooner.

Expert:  FiveStarLaw replied 5 years ago.

Hello,

 

If I can file proof of claim (to make me a creditor) and file the adversary (and prevail which I am sure we would) what type of creditor would that make me? Secured, unsecured, priority?

Unsecured unless your name is XXXXX XXXXX title.

I ask this because I have made $11,400 in payments on the trailer which will be repossessed by his lender and this constitues breach of contract (although breach of contract was evident once we found out he had lien on the trailer). I have contracts with him on the truck and trailer which my guess is that the trustee did not want to keep. The loss of this trailer will cost me and my company a great deal of loss of revenue (and basically I will have no other choice other than to file a chapter 13 myself since this IS my income)

The fraud of the debtor is the basis of your adversary action. It does not change your claim from unsecured to secured.

But I don't really see if this does me any good. I do not know how many other creditors he has or what he owes other than almost $400,000 worth of equipment that he sublet with liens on them. He has given everything back to the lenders except for this truck which was paid off in March, 09 and then the title was transfered 3 times and finally back to him and his sister in law (which were illegal transfers). I do believe however that this truck in question is the only asset in the estate therefore the only thing that could be sold to satisfy any debt. Since I need to purchase this truck and will be making an offer (which my atty says he believes the trustee will accept) would being a creditor be worthwhile. I am sure that I would win the adversary.

It might be worthwhile to file the adversary. Your advantage in prevailing in the adversary is that you will have a judgment and thus be owed money even after the bankruptcy. Most if not all of the other creditors claims will be discharged. You can collect on the judgment at such time that the debtor goes back to work and starts to accumulate new assets.

My atty in MI is going to present our offer for the truck which he has taken into the estate (we already have a deposit in his trust account for this), but according to him, the trustee could order the truck be put into storage and taken off the road until the decision is made on the sale, but he does not think that will happen (given my luck right now I would not want to make a bet!). This truck and trailer is our job; i.e. my income and economy.

I agree with your attorney. If you are adequately insuring the vehicle it is unlikely that the trustee would require it be put into storage.

And then there is the matter of $1050 paid to the attorney representing us in this proceeding....any recourse on that in the adversary?

You may be able to have the attorney fees assessed against the debtor. However be prepared for significantly more fees for the adversary.

I am assuming that I will need to pay him more as he has already been to court twice (341 meetings) so the total may be more. I really feel sorry for the other guys that had contracts with him who did not find out about this and will have their trucks and trailers repossessed on them.

All the stays on equipment have been lifted as of 8/6/09 and the lender for the trailer will not be back into his office until the 12th. We are going to try and work a deal with them, however, I don't think my credit will be good enough for them (Wells Fargo).

WF likely does not want the trailer back. They may thus be more lenient with their credit requirements.

Also, my atty in MI thinks that the trustee may have handed this case over to the US Bankruptcy Trustee for fraud (he left out a lot of stuff, income etc including my contracts with him and he tried to hide the truck we have). Does that help me at all?

No. It could actually hurt you. The result may be that the debtor's discharge is denied. This would mean that none of his debts would be discharged. You would then be one among many creditors after the bankruptcy.

I will check back later in the day.

Customer: replied 5 years ago.
If I filed the adversary and the US Trustee denied the bankruptcy would that judgement hold up outside the Bankruptcy court and what would be the time frame for filing this since the 341 meeting is over? And could I also file against the truck to hedge the bet that he may not get a discharge?
Expert:  FiveStarLaw replied 5 years ago.

If I filed the adversary and the US Trustee denied the bankruptcy would that judgement hold up outside the Bankruptcy court

 

Yes it would

 

Please remember to accept/bonus for work to date.

Customer: replied 5 years ago.

OK last question: How long do I have to file the adversary since the 341 meeting is over?

 

Since the truck has been taken as part of the bankruptcy estate (for now anyway) can the trustee sell it right away? Or does he have to wait for discharge? Throughout this period am I required to make payments to the trustee for the truck since it is still in my possession.

 

How could I retain rights to the truck if the bankruptcy is NOT discharged? I suppose that if I got the judgement for the trailer then I could execute on the truck for what is owed right?

 

How long should it be before the bankruptcy is discharged....or not discharged?

 

thanks for your help. This last answer will get bonus!

Expert:  FiveStarLaw replied 5 years ago.

Hello,

 

You sent me at least four more questions in your last post. Please accept and/or bonus the questions I already answered and then I can answer your questions here or you can submit them in a separate thread.

FiveStarLaw, Attorney
Category: Bankruptcy Law
Satisfied Customers: 36646
Experience: Bankruptcy Lawyer. Experienced.
FiveStarLaw and other Bankruptcy Law Specialists are ready to help you
Expert:  FiveStarLaw replied 5 years ago.

Hello,

 

Thank you for the accept.

 

OK last question: How long do I have to file the adversary since the 341 meeting is over?

The adversary can usually be filed at any time prior to discharge. If you look at the 341 notice it will state the date.

Since the truck has been taken as part of the bankruptcy estate (for now anyway) can the trustee sell it right away? Yes. Or does he have to wait for discharge? No Throughout this period am I required to make payments to the trustee for the truck since it is still in my possession.

Typically the answer would be yes. However the trustee has the authority to make a different arrangement.

Customer: replied 5 years ago.
Thank you so much for all your help and expertise. I think I know how I will proceed. Will give you as referrals when I can. Madison
Expert:  FiveStarLaw replied 5 years ago.
Good luck Madison. If you need any more assistance, you can let me know. Thank you.

JustAnswer in the News:

 
 
 
Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.
 
 
 

What Customers are Saying:

 
 
 
  • Mr. Kaplun clearly had an exceptional understanding of the issue and was able to explain it concisely. I would recommend JustAnswer to anyone. Great service that lives up to its promises! Gary B. Edmond, OK
< Last | Next >
  • Mr. Kaplun clearly had an exceptional understanding of the issue and was able to explain it concisely. I would recommend JustAnswer to anyone. Great service that lives up to its promises! Gary B. Edmond, OK
  • My Expert was fast and seemed to have the answer to my taser question at the tips of her fingers. Communication was excellent. I left feeling confident in her answer. Eric Redwood City, CA
  • I am very pleased with JustAnswer as a place to go for divorce or criminal law knowledge and insight. Michael Wichita, KS
  • PaulMJD helped me with questions I had regarding an urgent legal matter. His answers were excellent. Three H. Houston, TX
  • Anne was extremely helpful. Her information put me in the right direction for action that kept me legal, possible saving me a ton of money in the future. Thank you again, Anne!! Elaine Atlanta, GA
  • It worked great. I had the facts and I presented them to my ex-landlord and she folded and returned my deposit. The 50 bucks I spent with you solved my problem. Tony Apopka, FL
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C. Freshfield, Liverpool, UK
 
 
 

Meet The Experts:

 
 
 
  • FiveStarLaw

    Attorney

    Satisfied Customers:

    3203
    Bankruptcy Lawyer. Experienced.
< Last | Next >
  • http://ww2.justanswer.com/uploads/FL/FLAandNYLawyer/2012-1-27_14349_3Fotolia25855429M.64x64.jpg FiveStarLaw's Avatar

    FiveStarLaw

    Attorney

    Satisfied Customers:

    3203
    Bankruptcy Lawyer. Experienced.
  • http://ww2.justanswer.com/uploads/TL/tleeders/2012-6-13_204815_TSL1.64x64.jpg Terry L.'s Avatar

    Terry L.

    Attorney

    Satisfied Customers:

    2204
    Better Business Bur 15yrs bankruptcy experience. Chicago Bar
  • http://ww2.justanswer.com/uploads/mnphillips2/2009-03-13_203105_10984459-249293407.jpeg Phillips Esq.'s Avatar

    Phillips Esq.

    Attorney-at-Law

    Satisfied Customers:

    950
    B.A.; M.B.A.; J.D.
  • http://ww2.justanswer.com/uploads/CO/cortrightlaw/2011-12-5_4117_Kevin.64x64.JPG cortrightlaw's Avatar

    cortrightlaw

    Attorney

    Satisfied Customers:

    490
    Attorney practicing Bankruptcy Law including Chapter 7, Chapter 11, Chapter 12, and Chapter 13.
  • http://ww2.justanswer.com/uploads/Jay1968/2006-12-03_004423_JoeRossPhoto.jpg JoeLawyer's Avatar

    JoeLawyer

    Attorney

    Satisfied Customers:

    376
    Attorney in the practice of Bankruptcy Law since 1996
  • http://ww2.justanswer.com/uploads/DY/Dylatess/2012-9-11_1968_BHBTemplePhoto.64x64.jpg dylatess's Avatar

    dylatess

    Attorney

    Satisfied Customers:

    370
    35 plus years of experience specializing in bankruptcy law
  • http://ww2.justanswer.com/uploads/US/USLawAnswers/2012-9-20_23143_20090105211638Headshot3b.64x64.jpg Brent Blanchard's Avatar

    Brent Blanchard

    Bankruptcy Attorney

    Satisfied Customers:

    315
    Twelve years experience in all aspects of debtor & creditor BK.
 
 
 
Chat Now With A Bankruptcy Lawyer
FiveStarLaw
FiveStarLaw
Attorney
3317 Satisfied Customers
Bankruptcy Lawyer. Experienced.