QUESTION

Can we be sued even though we filed for bankruptcy?

Asked on Feb 16th, 2011 on Bankruptcy - California
More details to this question:
I filed chapter 7 in 2008. When filing we forgot to add a creditor in the bankruptcy. Can he sue us now for the debt?
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9 ANSWERS

William C. Gosnell
Yes, you can.
Answered on Feb 21st, 2011 at 11:46 AM

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Bankruptcy Attorney serving Orange, CA at Goodman & Dicus LLP
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This actually depends on the facts of your particular bankruptcy. If the creditor had actual knowledge of your bankruptcy, then it's the same as if the creditor were actually listed in your papers. However, if the creditor didn't have actual knowledge, or, more commonly, you lost track of one or more creditors and had no way to identify them in your bankruptcy schedule, the chances are still good that the debt will be considered discharged. If yours was a no asset case (that is, all your property was exempt), the debt is considered discharged unless, by being left out, your creditor lost the opportunity to contest the discharge on the ground that the debt was caused by your fraudulent or embezzling behavior, or by a willful and malicious act. It is often possible to reopen the bankruptcy and let the bankruptcy judge rule on whether the deb is, in fact, dischargeable. If the creditor sues you in state court for a judgment, you could argue the issue in that forum or have the case removed to bankruptcy court. If yours was an asset case-that is, at some point in your case, your unsecured creditors received some property from your bankruptcy estate-your situation is more difficult. Your nonexempt assets were already distributed to your other unsecured creditors, so the omitted creditor would be unfairly discriminated against if the debt were discharged. If the debt is a large one, you might want to hire a lawyer to reopen the case and argue that the debt should be discharged due to your particular circumstances.
Answered on Feb 18th, 2011 at 10:32 AM

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Trusts & Estates Attorney serving Camarillo, CA at Law Offices of Larry Webb
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Generally no. The procedure for dealing with a creditor who was inadvertently left off the schedules varies in different venues. Consult with a local attorney.
Answered on Feb 18th, 2011 at 10:31 AM

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judith runyon
If it was an unsecured debt then no - just provide them with a copy of your bankruptcy Discharge. If it was a secured debt then you have to reopen your bankruptcy case to add them in order for them to be given notice. You need to contact a bankruptcy attorney to discuss they further.
Answered on Feb 18th, 2011 at 10:31 AM

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Criminal Defense Attorney serving White Plains, NY
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Yes. You can be sued.
Answered on Feb 18th, 2011 at 10:30 AM

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Family Law Attorney serving Kingston, NH at DiManna Law Office, LLC
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Yes since you omitted the creditor from the Bankruptcy and the creditor had no notice, it was not included or discharged.
Answered on Feb 18th, 2011 at 10:30 AM

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Bankruptcy Attorney serving Hayward, CA at Carballo Law Offices
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You can be sued but the debt would have been discharged even if no notice was given if: 1. it was a Chapter 7; 2. There were no assets for the trustee to distribute (a no asset case); 3. The particular debt on which you are being sued was dischargeable; and 4. there was no specific determination by the court in an adversary proceeding that the debt was not dischargeable. You can defend the suit in the California court on the basis that you do not owe anything because of the bankruptcy discharge or reopen the bankruptcy case and bring an action for a determination that the debt was discharged, an injunction to halt the California lawsuit and for santions due to a violation of the discharge injunction. However, the first thing is to send a certified letter to the attorney representing the party suing you telling him/her that the debt was discharged (if that is the case based on what I stated above) and demanding immediate dismissal of the lawsuit. You must warn the attorney of possible sanctions by the bankruptcy court if he/she does not dismiss the case within ten days because of the violation of the permanent discharge injunction. If this sounds complicated or confusing, then you have proof that you need a lawyer to handle all this for you and you need one fast. This is indeed complicated even for lawyers who are not experienced in bankruptcy law and civil litigation at the same time. There is only a 30-day period to answer the lawsuit after being served with the summons and complaint. You must avoid having a judgment by default entered against you by the California court for failure to answer the lawsuit if you can not get the party suing you to dismiss the case right away. All this because you did not include all the creditors in your bankruptcy petition as required and provided them notice!
Answered on Feb 18th, 2011 at 10:30 AM

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Alternative Dispute Resolution Attorney serving Ventura, CA at Zahn Law Office
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If a debt was not listed in your petition and was not discharged in bankruptcy, then it remains a valid debt that may be collected.
Answered on Feb 17th, 2011 at 5:07 PM

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Consumer Bankruptcy Attorney serving Los Angeles, CA at Orantes Law Firm
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It depends. Were any assets distributed to creditors in your case? If not, there is a case that says that particular debt is discharged anyway and the creditor bound by the discharge injunction that accompanies every discharge. However, because human imagination is boundless and other doctrines can often be called up by attorneys for the situation at hand, if the amount is significant, the safest approach is to reopen the case and add the creditor.
Answered on Feb 17th, 2011 at 5:05 PM

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