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Phillips Esq.
Phillips Esq., Attorney-at-Law
Category: Bankruptcy Law
Satisfied Customers: 12955
Experience:  B.A.; M.B.A.; J.D.
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I hold a note for money loaned which is in default. The note

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I hold a note for money loaned which is in default. The note is for $163,000. If i get a judgement how do i keep the borrower from going bankrupt? Do i have a say in bankruptcy court if he goes that way? I live in Los Angeles Ca.
Submitted: 1 year ago.
Category: Bankruptcy Law
Expert:  Phillips Esq. replied 1 year ago.
Thank you for giving me the opportunity to assist you. Kindly use CONTINUE or REPLY button to ask for clarification or follow-up questions.



I hold a note for money loaned which is in default. The note is for $163,000. If i get a judgement how do i keep the borrower from going bankrupt? Do i have a say in bankruptcy court if he goes that way? I live in Los Angeles Ca



Response
: Unfortunately, you cannot keep the borrower from filing for bankruptcy protection. However, if or when the bankruptcy case is filed, you can file Complaint to Object to the Dischargeability of the Debt. You must provide the reason for your objection in your Complaint. This is an Adversary Proceeding similar to a trial in regular Courts. Adversary Proceeding is simply a litigation in the bankruptcy context. This means that the discovery requests such as deposition, request for production of documents, request for admissions, interrogatories, would be made by you and the debtor; per-trial conferences would be held, and if the case is not settled, there would be trial on the issues presented. After the trial, the Bankruptcy Judge would decide whether the debt should be dischargeable or not dischargeable. If the Judge rules in your favor, the debt would not be discharged as part f the bankruptcy case. This means that you can still go after the debt for the debt at the conclusion of the bankruptcy case. If the Court rules against you, the debt would be dischargeable in bankruptcy and you CAN NEVER go after the debtor for the debt if the debtor receives a Discharge Order from the Court. If you did, you would be in violation of Discharge Injunction and the debtor can sue you for the violation and for sanctions. See 11 U.S.C. Section 524.


You have 60 days from the date of conclusion of the Section 341 Meeting to file your Complaint. If you do not, you would waive your rights forever.

Customer: replied 1 year ago.

Questions: Can he just decide to go BK just to avoid paying me? If he is only going BK because of my judgement and I am willing to negotiate a payout that fits his current income would a judge be likely to grant him BK? I don't think he has any property assets anymore, just his income from his construction business. What is his incentive to pay me if he can go BK for a lot less? if i spend the money to get the judgement can he just negate it with a BK, not pay me and just open an new bank account and keep going?

Expert:  Phillips Esq. replied 1 year ago.

Questions: Can he just decide to go BK just to avoid paying me?


Response 1: Yes, he can.


If he is only going BK because of my judgement and I am willing to negotiate a payout that fits his current income would a judge be likely to grant him BK?



Response 2
: Yes. If he meets the requirement for bankruptcy filing, he would receive a Discharge Order from the Court wiping out your debt, his arrangement with you notwithstanding.


I don't think he has any property assets anymore, just his income from his construction business. What is his incentive to pay me if he can go BK for a lot less? if i spend the money to get the judgement can he just negate it with a BK, not pay me and just open an new bank account and keep going?


Response 3:
Unfortunately yes.

Customer: replied 1 year ago.

what are the requirements for going BK in California? Am i assuming correctly that going BK is relatively inexpensive for him if he has no real property and that suing and enforcing a judgement etc by me might not be so inexpensive? Still can't decide what to do? Any advice?

Expert:  Phillips Esq. replied 1 year ago.

what are the requirements for going BK in California?



Response 1:
He needs to meet the Means Test if he is filing a personal bankruptcy. If he is not filing a personal bankruptcy or if his debts are primarily non-consumer debts, there is no Means Test. He (“You”) would be eligible to file for Chapter 7 bankruptcy protection, if you meet the Means test—the income test. If your income is equal to or less than the current income guidelines for your family size in your state, you would be eligible to file for a Chapter 7 bankruptcy all things being equal. The income used in calculating the Means test is the income for the 6 months before the filing of the bankruptcy petition. This means that if you are filing for bankruptcy protection this month, August 2013, the income that would be used is your income from February 2013 to July 2013. If you are filing next month, September 2013, the income that would be used in the Means Test calculation would be the income from March 2013 to August 2013, etc. In Chapter 7, if the Court grants you a Discharge your debts will be wiped out with some exceptions such as some taxes, child support, alimony, which are not dischargeable. You would get a clean state, a fresh start.

These are current income guidelines for the State of California:

Family size of one person $48,415.00
Family size of two persons $
63,030.00
Family size of three persons $
67,401.00
Family size of four persons $
75,656.00
Add $8,100.00 for additional individual

The filling fee for Chapter 7 is $306.00.




Am i assuming correctly that going BK is relatively inexpensive for him if he has no real property and that suing and enforcing a judgement etc by me might not be so inexpensive?


Response 2: Bankruptcy is an expensive proposition and it is only used as a last resort by most debtors. For one thing, filing for bankruptcy Chapter 7 would stay on his credit file for 10 years making it impossible for him to get credit—bankruptcy filing devastates one's credit score. Most people do not file for bankruptcy just for the hake of it. They file after they have exhausted all options and usually because their creditors are not willing to work with them.



Still can't decide what to do? Any advice?




Response 3:
I am sorry, the terms of service prohibit me from giving you legal advice.

Phillips Esq., Attorney-at-Law
Category: Bankruptcy Law
Satisfied Customers: 12955
Experience: B.A.; M.B.A.; J.D.
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