Bankruptcy Law Questions? Ask a Bankruptcy Lawyer Now.
Hi, I'd like to assist you with your bankruptcy questions this morning.
First of all, you are likely a creditor of the bankruptcy estate, so you should have been listed in the bankruptcy.
In a Chapter 11 case, the debtor, as a debtor in possession, will usually be allowed to obtain unsecured credit and incur unsecured debt in the ordinary course of business without court approval.
These types of debts should be repaid as an administrative expense, meaning that you should have been repaid before other unsecured creditors.
I need to clarify a few things to provide you with an accurate answer.
Your best guess is fine for the following questions; I'm just looking to create a rough timeline so can I try to determine whether your deposit is still recoverable: When did the landlord file the Chapter 11? When did you deposit the funds with the landlord? When did you demand the return of the deposit?
And what exactly do you mean by "entered," that the Chapter 11 reorganization plan was confirmed, or that the debtor was actually discharged from the bankruptcy?
Please let me know the answers to these questions, and I will be happy to provide you with a more detailed answer. Thank you.
Thank you for the help. On PACER it indicates that it was filed in 1992 and entered or terminated in 2007. The deposit was given and asked to be returned in '97, and that is when the case occurred. I am not listed in
PACER under list of creditors. NY has a twenty year statute of limitation for judgments.
In your situation, you might want to take the position that the debt owed to you (i.e. your security deposit) was not discharged in the Chapter 11 bankruptcy under Section 523(a)(3) of the Bankruptcy Code, which states in part that a "discharge... does not discharge an individual debtor from any debt- (3) neither listed nor scheduled... with the name, if known to the debtor, of the creditor to whom such debt is owed."
If the Debtor is a corporation rather than an "individual debtor," the case would have most likely been closed without a "discharge" per se, and you will likely be able to pursue collection of your judgment.
This situation is a little tricky and complicated, so you might want to consult a local attorney before trying to collect on your judgment (or at least fully inform your collections attorney of the situation).
The debtor was an individual, but I though that debts are not discharged under Chapter 11? In fact PACER said under discharge that "discharge not applicable." What problems would arise?
If the Debtor was an individual, you're likely in good shape regardless of whether the Debtor received a discharge or not. If the Debtor didn't receive a discharge, you're now in the position of a non-bankruptcy creditor and can pursue any available state court remedies accordingly. If the Debtor did receive a discharge, you would pursue state court remedies anyway, and if contested, use the argument that your debt was unscheduled and you never received notice, etc.
The only real potential issue I could see arising might be the timing of when you obtained the judgment. If the automatic stay was still in effect when you filed your complaint and/or obtained a judgment, that might be grounds to vacate the judgment. This might be something to look into.
How would I be able to find out if the stay was in place during that time? And if it were in place, how would it be grounds to vacate the judgment if the court confirmed that the deposit should have been returned but it was not? It appears from what you are saying that anyone could engage in activities resulting in civil action and avoid it under the auspices of chapter 11
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