I won a judgement in small claims court. The other party filed chapter 7 Bankruptcy. Is there any way I will get paid?
State/Country relating to question: Minnesota
Just was notified she was filing bankruptcy.
There are three possibilities
First, the other party's bankrutpcy case is dismissed for some reason such as not complying with the bankruptcy process. If so, your claim is still good.
Second, the Chapter 7 trustee finds nonexempt assets and you get a cut of the proceeds
Third, you file an adversary proceeding objecting to the other party's discharge (as to all creditors) or the dischargeablity of your claim in particular. This might be a good idea if your claim was based upon fraudulent conduct of the Debtor. However, it's probably not cost effective to do this.
Most of the time, however, none of these things happens and you get nothing.
I'd need to know more about the specifics to determine which, if any, of these three outcomes are most likely. However, my gut is that you won't receive anything.
Make sure and file your proof of claim anyway!
Look at the bright side, maybe you drove him/her into bankruptcy and got a small pound of flesh....
United States Bankruptcy Code:
Chapter 11 Business Attorney;
Restructuring and Recoveries
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