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Terry L.
Terry L., Attorney
Category: Bankruptcy Law
Satisfied Customers: 2517
Experience:  Better Business Bur 15yrs bankruptcy experience. Chicago Bar
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What is the criteria to file bankruptcy to avoid creditor Here

Resolved Question:

What is the criteria to file bankruptcy to avoid creditor

Here I am using an example. I try to see from this person's position, how could he use bankruptcy law to avoid court judgement collection.

Mr. F sold a couple of his business assets in the last a couple of years.
The total proceeds he received from those sale were at least 1.5 millions.
He is currently owning another one or two businesses together with the real-estates
where the businesses are operating. He also has his own residential house with mortgage on it. His credit history has been at least good to excellent. He also have a couple of business bank account under the name of companies he operates.

A business dispute lawsuit was filed against him in October of last year for breach of business contract and fraud. He has been avoiding court services and now is facing default judgement.

The question: if he files bankruptcy protection after the above lawsuit date, will the bankruptcy court be able to find the pending lawsuit? Here I try to understand the entire process and purpose of bankruptcy protection. In his example, is he likely to be granted bankruptcy provided he does not have other significant debt? How his assets were examined if he try to file for personal bankruptcy protection? And if he violated law, can the bankruptcy protection become void?
Submitted: 1 year ago.
Category: Bankruptcy Law
Expert:  Terry L. replied 1 year ago.

Terry L. :

Hi, thanks for your question. You should hire a lawyer for specific legal advice. No attorney client relationship is created here.

Terry L. :

First, bankruptcy stays all collection action, so the underlying suit would stop once the debtor files a case.

Terry L. :

if it was before judgment, the creditor could object to the discharge in the bankruptcy case based on the fraud.

Terry L. :

This would be called an adversary.

Terry L. :

The matter would be litigated in the adversary, and if the creditor is successful, the debt would be non-dischargeable, and could then collect on the debt post-bankruptcy.

Terry L. :

If the judgment is entered, and fraud is stated in the judgment order, then the adversary would be much easier to win, as the matter can't be re-litigated based on res judicata principles.

Terry L. :

When the bankruptcy is filed, the debtor will get relief from creditors and stop suit etc, until the adversary is decided.

Terry L. :

Let me know if you have any questions. Thnaks

Terry L. :

thanks

Terry L. :

Terry

JACUSTOMER-1rzsdvxy- :

Thanks. Two things.

JACUSTOMER-1rzsdvxy- :

Based on the example I described above. Can anyone like him go ahead to file bankruptcy protection? Usually, what is the ground to give such

JACUSTOMER-1rzsdvxy- :

a protection?

JACUSTOMER-1rzsdvxy- :

Secondly, the plaintiff's complaint contains 1) Breach of contract and 2) Fraud. In default judgement, will these two counts be granted? If so, the judgement shall have stronger power even if the defendant files bankruptcy.

JACUSTOMER-1rzsdvxy- :

By the way, I prefer you response not in chat mode because we cannot easily get time together. You just answer the question and I will view it and then either reponse or rate it. Thanks.

JACUSTOMER-1rzsdvxy- :

Could you respond to the follow questions above?

Terry L., Attorney
Category: Bankruptcy Law
Satisfied Customers: 2517
Experience: Better Business Bur 15yrs bankruptcy experience. Chicago Bar
Terry L. and other Bankruptcy Law Specialists are ready to help you
Customer: replied 1 year ago.

Bankruptcy question and judgement collection


This question is related to my previous question I asked.


1) Can anyone just go ahead to file bankruptcy protection? Here I mean does the filing person have to show no net asset (i.e. owes more than owns)?


2) Regardless he files bankruptcy or not, if he gets a judgement with fraud charge, the collector may go after his retirement assets(excluding social security) which were funded by fraud revenue. Will this to be determined by judge? What if the amount of retirement assets funded by fraud revenue not clear? Will court decide that?

Expert:  Terry L. replied 1 year ago.
For chapter 7, yes, generally, the debtor has no assets, or enough exemptions to protect those assets. Any unexempt assets can be liquidated by the trustee in the case.

You would have to file an adversary to prove fraud, and then you get a determination of non-dischargability if you are successful. Then you need to collect on it with your state/federal collection
Terry L., Attorney
Category: Bankruptcy Law
Satisfied Customers: 2517
Experience: Better Business Bur 15yrs bankruptcy experience. Chicago Bar
Terry L. and other Bankruptcy Law Specialists are ready to help you

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