Hello, and thank you for contacting Just Answer. My name is Adam, I am a bankruptcy law professional, and I look forward to discussing your questions this morning.
So that I can best answer your question, I need a little bit more information about what happened with the judgment. On what grounds did the appellate court reverse the judgment? Have you checked the status of the case against you recently with the clerk of the superior court?
the case was archived and there was no further action by the plaintiff after it was reversed by the appeals court
Great, thank you. And what were the grounds on which the judgment was reversed? Also, as a last question, are you working with a bankruptcy attorney?
the case was reversed because 1. I was never served and was outside of the United states on an airplane at the time they said I was served. They conducted a proof hearing without notifying me or my counsel and the appellate court found that they had not made a prima facie case against me. I had requested reconsideration from the superior court judge as well and it was denied. The appeals court was rather harsh to the judge and the plaintiff's attorney.
No pro se chapter 13 can't afford an attorney right now.
little debt only trying to strip a second mortgage and reaffirm the first.
Ok, thank you for the extra information. So long as the issue of whether or not a debt was owed is still up in the air with the superior court (meaning that the court's decision was reversed and that a hearing on the merits has not yet been conducted), it would difficult for the creditor to allege that a debt is owed. If this creditor were to present a proof of claim to the court, you would have the opportunity to contest it as an invalid debt. Any party can contest a proof of claim, and you could do so on the grounds that the matter of whether or not a debt is owed is still in front of the superior court of the state of New Jersey, and thus should not be considered a valid debt.
I'm not sure there is any specific language to use with the creditor's attorney, but insisting that you will challenge any proof of claim filed on the grounds that the issue of whether the debt is valid is still pending in state court may be enough.
Ultimately, if the creditor were to file a proof of claim, and you contested it as the debtor, it would then be up to the court to determine if the debt is valid and should be allowed as part of the chapter 13 repayment plan. Your argument, that you have contested the debt and that a judgment for the debt was reversed by the state appellate court has merit, but it would be up to the bankruptcy court to determine for itself whether or not a debt exists. Your chances should be good, given that the appeals court found that a prima facie case of breach of a debt agreement (or whatever they alleged) was not proven.
thanks so much I was sort of hoping to hear that I could threaten them with malicious prosecution or abuse of process because they have not made any attempt to take the case forward once it was remanded to the superior court so based on non prosecution, they would have a difficult argument to make that it is still valid. Here's what happened today bankruptcy chapter 13 court. The second mortgage holder tried to have me dismissed from chapter 13 because this open judgment which is on the books but not enforceable puts me well over the allowable limit. I argued and the judge agreed that the judgment was not enforceable but he stated that IF the creditor showed up and stated that they WERE owed whether or not it was factual, she would have no choice but to dismiss my case immediately. Right now I have 2 months before the next hearing but I'm sure that the second mortgage's attorney will contact this creditor and ask them to file a proof of claim immediately to have me dismissed. At that point, I'm going to be forced into a 7 where I will not be able to keep my home.
That is a tricky situation, I am surprised that the Judge stated that they would not consider whether or not a proof of claim was valid before forcing someone to convert to a chapter 7 (or just dismiss the case altogether). You could, however, certainly make the argument that malicious prosecution had occurred, but the problem is that while the lawsuit still remains alive, the issue of whether or not a debt is owed is not fully resolved, leaving the creditor some room to still pursue the debt. Once a bankruptcy petition has been filed, the creditor can make the argument that, even if they wanted to, they cannot now pursue a new judgment with the superior court because of the automatic bankruptcy stay, making a proof of claim the only way to collect on the debt. This would be where a bankruptcy attorney would be helpful, because at least how it should work is that if a creditor files a proof of claim that could hurt your access to relief under chapter 13, you should have the opportunity to contest the proof of claim before the court determines its effect on your petition.
What is sounds like is that this judge would not allow that, and an attorney may be in a better position to make an argument to the court that the underlying debt is invalid and thus the proof of claim should not affect your chapter 13 petition. Also, if it has really been two years, the judgment probably should have been vacated and the original suit dismissed with prejudice, before filing for bankruptcy, which would have saved you some of this headache.
Certainly talking to the creditor's attorney may help keep them from filing a proof of claim, and you can argue malicious prosecution if you want to, but I am not sure ultimately that it is a threat with teeth attached. Going to the superior court and getting a vacated judgment and dismissal with prejudice may be the better option, because then you would have court issued proof that there is no underlying debt should a proof of claim be filed. However, whether or not this can be done within 2 months is tough to know.
This is a tough situation to be in and, short of encouraging you to retain the assistance of an experienced bankruptcy attorney (which may not be an option, I understand), attempting to either resolve the issue of the judgment or as you note encourage the creditor's attorney not to seek a proof of claim in light of the judgment (and arguably underlying debt) being shot down by the appellate court (and perhaps malicious prosecution of an already settled issue), may be your only choice.
I do see what you are saying but again, if they do bring a proof of claim to the court, is that extending the statute of limitations whereby they could be open to a damages suit from me because of their actions. As it stands, It's been over two years so I don't know if I can sue them for damages but if they continue prosecution of this case, would that effectively extend the time limit for me to sue them ?
Possibly. The statute of limitations on a malicious prosecution case by you against them arguably would not run until they actually did something that constitutes malicious prosecution. You would be arguing that the proof of claim would be the malicious prosecution, and so the statute of limitations for you would start then, so the matter should not be time barred. Now, whether or not there actually is malicious prosecution would be a different matter, but the matter should not be time barred. Again, hopefully this will be a moot point and the creditor will not take this action.
creditors attorneys will prosecute a goldfish if they can collect fees from their client for doing so and to make their case, they're willing to lie about anything that they need to lie about to make a case. Client is a large insurance company. I'm thinking to speak directly to the ins. co to stress that the only reason this was brought to court in the first place was the issue of billable hours to the client. At this point, there is nothing for the ins. co to get from me and it's only going to cost them money/potentially open the door for me to sue them for punitive damages?
That is certainly one approach (as an attorney I will refrain from speculating on what the motives of another attorney are), and it may be that the insurance company has no interest in filing a proof of claim in the first place. Communicating with them may prevent them from taking any action that could jeopardize your chapter 13.
okay, thanks all good thoughts
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