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socrateaser, Attorney
Category: Bankruptcy Law
Satisfied Customers: 39043
Experience:  Attorney and Real Estate Broker -- Retired (mostly)
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if you have current litigation against you and they are claiming

Customer Question

if you have current litigation against you and they are claiming securities fraud and fraud in order to get a lump sum of money. It has nothing to do with the case. Can you still file BK?
Submitted: 4 years ago.
Category: Bankruptcy Law
Expert:  socrateaser replied 4 years ago.

Anyone can file bankruptcy whenever they choose. However, if the current action for fraud is stayed by the bankruptcy filing, then the plaintiff may either try to get the bankruptcy court to grant relief from stay in order to complete the state court litigation, or failing that, the plaintiff may file an adversary proceeding in bankruptcy court and try to prove that a valid claim exists and that the debtor (you) have committed a fraud.

The point is that filing bankruptcy may not cause the creditor to just "go away." The case may just move over to the bankruptcy court.

Hope this helps.