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If a debtor in possession (chapter 11) has a court order to

pay another parties legal fees...
if a debtor in possession (chapter 11) has a court order to pay another parties legal fees related to post petition litigation, but then has his bankruptcy converted to a chapter 7.....do the legal fees that the debtor owes to the other party (per a court order) fall under bankruptcy protection or can that party go after wage garnishment?
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Answered in 6 minutes by:
8/26/2017
Michael Bradley
Category: Legal
Satisfied Customers: 1,131
Experience: Owner at The Protection Group LLC
Verified

in my opinion no it does not fall under protection right away

however, they can try to motion the court to have that debt converted to unsecured under the chapter 7

but it would not be autonmatic

I do not believe that a wage garnishment can be done since he has bankruptcy protection and the court would need to be motioned to allow for collection of that debt. When it was in 11 it could be a provision of the discharge to pay

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Customer reply replied 2 months ago
even if the debt (court ordered legal fees) were post petition?? What is stopping a debtor from abusing litigation outside of bankruptcy if that is the case?

he still has bankruptcy protection and you can not go after that money without bankruptcy court approval as there is a stay oin place

reorganization converted to a straight liquidation

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Customer reply replied 2 months ago
can a debtor get in trouble with the bankruptcy court if he is racking up post petition debt in the form of having to pay other parties legal fees for bad litigation conduct?

yes if it is brought to the attention of the bankruptcy judge

Michael Bradley
Category: Legal
Satisfied Customers: 1,131
Experience: Owner at The Protection Group LLC
Verified
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