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BKAnswerMan, Attorney
Category: Bankruptcy Law
Satisfied Customers: 25
Experience:  Experienced Bankruptcy Attorney that has represented over 1,000 clients in consumer bankruptcy proceedings.
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How do I file a lawsuit in Bankruptcy Court...

Resolved Question:

How do I file a lawsuit in Bankruptcy Court...
Submitted: 5 years ago.
Category: Bankruptcy Law
Expert:  BKAnswerMan replied 5 years ago.
You would file an adversary proceeding with the bankruptcy court alleging some violation of the bankruptcy code oftentimes in conjunction with some other type of violation. The most common type of bankruptcy lawsuit is for non-dischargeability of debt due to some type of fraud or misrepresentation.

If you are a debtor there is no filing fee to initiate a lawsuit; however, there is a strong likelihood that the judge will refer you to state court to hear the matter because of a recent case Stern v. Marshall.

If you are a creditor then you will need to pay a filing fee. You need to allege that the person has broken the law with a document called a complaint. The complaint needs to be filed with the applicable bankruptcy court and served on the person whom you are suing. You will need to consult with both the Federal Rules of Bankruptcy and the Local Rules of your district in order to determine the exact process in your area. If you are seeking to have a debt you are owed determined to be non-dischargeable, then you will need to make sure that your case is filed by the deadline to object to dischargeability. This is usually about 60 days from the First Meeting of Creditors.

The service requirements are less strenuous in bankruptcy court, so you can serve a lawsuit via US Mail (of course you would want to serve it certified, return receipt). Many districts have forms that you can use.

Once the lawsuit is filed, then you can start the discovery process. Mediation is always encouraged after a case is filed to reduce the strain on the court system. This may be a great way to settle out your claim.

There was a recent supreme court case Stern v. Marshall, that has caused a lot uncertainty on which cases can be heard in bankruptcy court and which ones cannot. In the past the bankruptcy courts authority to make final judgments was very broad. Now; however, there is greater limitations on bankruptcy judges. I hope this helpful. Please let me know if I can clarify for you further.
Customer: replied 5 years ago.
to be very specific. I filed a cross complaint to a default judgement. the judge has ruled that my cross complaint cannot be filed because of the default against me. So I am now filing bankruptcy and I would like to now file an original complaint in bankruptcy court since my cross complaint was denied because I lack standing in the other case. Is that possible.
Expert:  BKAnswerMan replied 5 years ago.
Did the cross complaint that you filed involve the same series of events and facts as the original complaint that resulted in a default judgment or does it relate to separate facts?
Customer: replied 5 years ago.
separate facts. The case is a fraudulent transfer that I did not answer. My cross was against a total different group of defendants. The lawsuit was a creditor against me for a fraud property transfer. My cross was forgery and violations against the creditors attorney and countrywide mortgage company for foreclosure.
Expert:  BKAnswerMan replied 5 years ago.
Unfortunately, real estate cases are handled by the state court system. I don't see anything that would prevent you from filing against the other defendants as a new complaint and not a cross-complaint, but Stern v Marshall creates authority problems for bankruptcy judges. Bk judges are not allowed to issue a final ruling on the matter and I have seen a number of judges simply refer these types of cases back to the state courts.
Customer: replied 5 years ago.
The case is in California I live in Oklahoma since 2009. Do I proceed in Federal court for jurisdictional reasons or do I have to file in State Court. If I am able to file in Federal court can I file in Oklahoma or do I have to file in Federal court in California. Also regarding the real estate issue, since I am not a citizen of California can that be filed in Federal Court and can that be filed in Oklahoma or do I have to proceed in California.
Expert:  BKAnswerMan replied 5 years ago.
Here is a very informative page on the distinction between State and Fed courts: bottom section is particularly informative although it doesn't talk about the particulars of how the state retains jurisdiction over property within its borders (they do).Also, since it is a case involving real estate the other defendants may argue that it involves the same sequence of events as the foreclosure and should have been brought by cross complaint. If you do decide to pursue this further, then you should also look at the underlying contrct to see if it has restrictions about where a suit can be brought. You need to make sure you listed the lawsuit on Sch B of your bk papers as you will lose your right to sue if a claim was not listed. Ultimately, jurisdiction and venue are fairly complicated in a situation like yours. It seems to me that there is concurrent jurisdiction in CA state court and Fed Court (depending on the amount of damages) you really need to weigh the cost of filing against the likelihood of success. My suggestion is to talk to a real estate attorney CA where the property is located so you can obtain a more thorough analysis of whether filing suit is worthwhile. Many of the state courts in CA are very pro- bank and the likelihood of success can better be analyzed by an attorney in CA.
Customer: replied 5 years ago.
ok. I am the debtor. So all I need is to file the original complaint when I file my voluntary petition for bankruptcy.
Expert:  BKAnswerMan replied 5 years ago.
Yes, that is correct. You would need to file a new complaint alleging a different cause of action stemming from different facts and parties than the default judgment. You need to make sure to list a claim against the parties that you are considering suing on Schedule B. Your case wouldn't be heard in bankruptcy court. I believe I have answered your question.
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Customer: replied 5 years ago.
What is the actual name of the schedule B form to add the names. I want to be sure to file the correct document. They are several forms in the B category.
Expert:  BKAnswerMan replied 5 years ago.
Schedule B is the name of the form where you need to list the claim as an asset. Here is a link to the form I am referring to. You would want to list the claim under line 21.
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