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cfortunato
cfortunato, Attorney
Category: Bankruptcy Law
Satisfied Customers: 8023
Experience:  Bankruptcy professor.
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IM A CPA WITH A CLIENT ISSUE: CLIENT IS WITH NO ASSETS EXCEPT

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I'M A CPA WITH A CLIENT ISSUE: CLIENT IS WITH NO ASSETS EXCEPT NONVESTED STOCK IN HER PRIVATE COMPANY EMPLOYER. STOCK VESTS ONLY WITH A LIQUIDITY EVENT SUCH AS IPO, MERGER ETC. #1: WOULD A CHAPTER 7 FILING LIKELY CAUSE THE CREDITOR'S COMMITTEE TO WANT HER NONPUBLIC, NONVESTED STOCK?
#2: SHE HAS ALREADY 2 OR 3 DEFAULT JUDGEMENTS FROM CREDIT CARDS ABOUT 60K. NOW ANOTHER (MIDLAND FUNDING ON BEHALF OF CHASE) IS SUING AND SHE APPARENTLY DID NOT RESPOND TO AN INQUIRY LAST JULY ABOUT THE MATTER AND ONLY WROTE TO THE LAWYERS HANDLING IT FOR MIDLAND IN NOVEMBER REQUESTING INFO ON THE ACCOUNT SINCE HERE DIVORCED HUSBAND MIGHT HAVE OPENED THE ACCOUNT IN 1998 (OUT OF CREDIT HIMSELF) USED IT, MADE A LAST PAYMENT IN 2009 BEFORE SHE WAS ABLE TO EVICT HIM ON AN FRO FROM MARITAL RESIDENCE. TRIAL IS SET FOR JANUARY 6TH. ARE THE JUDGEMENTS ALREADY IN PLACE AND/OR THIS MATTER RELEASED IN A CHAPTER 7 OR 13 BANKRUPTCY?
Submitted: 5 years ago.
Category: Bankruptcy Law
Expert:  cfortunato replied 5 years ago.
Hi JACustomer,
1) The non-vested stock will be treated in the same manner as all other assets. The Bankruptcy trustee can keep track of the stock indefinitely, and cash it in whenever it does vest. In a situation like this, the debtor will receive a discharge, but the case will remain open until the stock vests. There is no time limit for this, and I know a trustee who is still holding onto a non-liquidated asset after 7 years.
2) Debts that have already resulted in judgments can also be discharged, and the judgments vacated.
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