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Terry L.
Terry L., Attorney
Category: Bankruptcy Law
Satisfied Customers: 2890
Experience:  Better Business Bureau. 18yrs bankruptcy experience. Chicago Bar Assoc. American Bankruptcy Institute member.
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Florida bankruptcy. Individual A loaned individual B approximately

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Florida bankruptcy. Individual "A" loaned individual "B" approximately $100 K on or about 2006. This was an oral agreement. Both agreed to repayment terms with non-usurious interest. B has not paid A back. There is no contract however A has sent B bi-weekly e-mail updates of balance including interest. B has acknowledged in e-mails the debt. A has just discovered that satisfaction of deficiency was entered in a Hillsborough county case against B for close to $5 million on an unrelated civil suit. B evidently does not have the ability to pay A. A is aware that if he were to file suit and even obtain a final judgment in his favor, he will still have to collect on judgment. A is concerned that B will file for bankruptcy. How can A ensure that he will be considered a creditor in the event B files? There is no record of the debt except the string of e-mails. What other remedies are available to A?
You need to reduce the debt to writing. Now, it is arguable if B tries to dispute the debt under the statute of frauds, that it could be disallowed, but your emails are evidence of acknowledgement of the debt. In the event that B files bankruptcy, they should schedule A in their case, whether disputed or not. If they file and A isn't listed, and it is a chapter 13 (not possible if debt is $5M) or chapter 11, then A can file a proof of claim to be paid from proceeds in the case. If it is a chapter 7 filing, the debt is only discharged if scheduled. A proof of claim is only needed in chapter 7 if there are assets for distribution, for which you can contact the court and/or Trustee in the case to see if there are. A can still sue, and try to collect on the debt under the state court rules. If B is garnished, A would have to wait in line. A could attach the judgment lien onto Real Estate or other allowable assets under state law. They would then receive proceeds upon liquidation of the assets (sale, refi, foreclosure) based on the order of judgment lien. Consult a local attorney to monitor the case, perhaps best to stay cordial, to get voluntary payments from B, despite the obligations to the 3rd party suit.
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