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Ask Terry L. Your Own Question
Terry L.
Terry L., Attorney
Category: Bankruptcy Law
Satisfied Customers: 2900
Experience:  Better Business Bureau. 18yrs bankruptcy experience. Chicago Bar Assoc. American Bankruptcy Institute member.
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I am a pro se defendant in a breach of contract suit that includes

Customer Question

I am a pro se defendant in a breach of contract suit that includes a count of fraud. To avoid trial I am considering settling the case by agreeing to a judgment in an amount satisfactory to both parties. However, the end run is that I will most likely declare personal bankruptcy and I just want to make sure that by agreeing to a judgment, I am also not admitting to the Fraud count, which I understand would prevent it from being discharged later on - or is there a way to structure the judgment so that the Fraud admission is excluded ? The Fraud count is very weak and I'm told VERY difficult to prove in court and was inserted after the fact to specifically prevent the bankruptcy discharge.
Submitted: 6 years ago.
Category: Bankruptcy Law
Expert:  Terry L. replied 6 years ago.

Terry L. :

Hi and thank you for your question. In the future, you can request me to answer any further questions.

Terry L. :

Once the matter is reduced to judgment, the matter cannot be re-litigated in bankruptcy court.

Terry L. :

Fraud, if proved, is non-dischargeable in the bankruptcy, yes.

Terry L. :

You want to be sure that there is no order of fraud at all.

Terry L. :

It might be something to talk to your attorney about, filing now, before judgment, and then letting them litigate it again in bankruptcy court. IF you feel the claim is week, then you may defeat it in the bankruptcy case.

Terry L. :

Here is the cite to the bankruptcy code, so that you can reivew

Terry L. :

a(2) is the main section.

Terry L. :

You should do your research to see how your local jurisdiction has treated these types of claims.

Customer:

unfortunately I do not have an attoryney representing me in this, but I woudl prefer not to go to trial on it as that could very well wind up with me on the losing end of it compeltely

Terry L. :

if there is fraud in the agreed judgment, then you would likely not be able to discharge the debt in bankruptcy

Customer:

there are 3 counts - accountability, breach, and fraud. they are offering and I am considering accepting a judgment - so does that automaticlaly admit to the fraud ?

Terry L. :

first, I would always recommend an attorney. Second, talk to a local bankruptcy attorney, they may be able to help you word the order, and help prepare you for the bankruptcy filing.

Terry L. :

I cannot advise you on case specific legal matters, this forum is not creating an attorney client relationship unfortunately.

Customer:

the judgment that they prepared and sent me doesn't say anything about the specific counts just "


Plaintiff and Defendant agree that the following entries may be made in this action:


 


Judgment for Plaintiff in the amount of $390,000.00, without costs, all rights of appeal waived.

Customer:

then just signatures

Terry L. :

do you have a question about the bankruptcy case?

Terry L. :

as I stated, I am prohibited in this forum to provide specific legal advice.

Terry L. :

i am only able to provide legal information about the law, definitions, filing requirements, procedure, local rules etc.

Terry L. :

The creditor could still file an adversary objection though if they feel the debt would be denied discharge under 523

Terry L. :

then the judge would hold a trial to determine the facts etc.

Customer:

ok - I get it. so if I understand this correctly, if I agree to have a judgment entered then whatever is listed in the complaint is what the judgment is for including the fraud and that woudl not be discharged in a bankruptcy if in fact there was a judgment for fraud

Terry L. :

if you admit to the fraud, then you would lose the discharge argument, that I concur.

Terry L. :

you really need to meet with a bankruptcy attorney to help advise you on what you should or should not admit to

Terry L. :

my hunch is that you'll see an adversary objection in the case either way.

Terry L. :

so you best prepare with a bankruptcy attorney who can give you specific advice based on the unique facts of the case.

Customer:

I will need get an atty to review this with me, but legally speaking agreeing to a judgment would be admitting to the counts/claims in the complaint - correct ?

Customer:

you've been very helpful - thanks

Terry L. :

it depends on the order.

Terry L. :

best of luck to you, hope you can discharge it!

Terry L. and other Bankruptcy Law Specialists are ready to help you