Submitting Bankruptcy the Best Ways To Select A Bankruptcy Attorney
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I am not an attorney, I am a judgment matchmaker. This article is not legal advice, it is my opinion. When you need legal advice or a strategy to use, please contact an attorney.
What if you have a judgment against your "wealthy" judgment debtor with a history of going from rental property to rental property, paying as little as possible to live there, and then staying without paying rent until they get forced out by evictions? (This does not happen very often anymore, in the era of credit reports and landlord associations, however wads of cash upfront, often blinds many landlords.)
What if you discovered where the debtor worked, garnished their wages, and then you got a letter from the US Bankruptcy Court, that your debtor has filed for Chapter 7 bankruptcy?
As soon as you received the bankruptcy notice, you should quickly tell the Sheriff to stop the wage levy. After a debtor files for bankruptcy protection, you should not try to collect money from them without first written leave from a bankruptcy court.
When your judgment debtor files for bankruptcy, is it game over, and the judgment has become history? If the debtor is really broke, yes. When the judgment debtor is not poor, a crook, and hiding their assets; and you have the time to spend a lot of hours in and out of bankruptcy court, maybe not.
When you have time, you can examine fraudulent debtors in bankruptcy court, even for small judgments. When you are busy, it makes sense only with judgments averaging $15,000 or more. When the judgment debtor is really broke, let it go, don't waste time attempting to squeeze juice from stones.
To expose a judgment debtor's perjury and fraud to the attention of a bankruptcy court, requires starting an adversarial proceeding. When you are not an attorney, you should know what you are doing, or better yet, retain a bankruptcy lawyer. If you hire a lawyer, don't put your brain on hold, keep thinking about what can help win your case, and give your ideas to your lawyer. Never presume your lawyer knows what you know.
You might expect that a judgment debtor's pattern of defrauding landlords could be a basis for a complaint for fraud in the bankruptcy court. I'm not a lawyer, and my opinion is if the judgment debtor defrauded someone else, you'll have a hard time asserting fraud in the bankruptcy court; as you weren't a party to the cause of action, and not defrauded personally by the judgment debtor.
However, if you were the debtor's landlord, you may have a possible cause of action for rental fraud, stemming from the original debt under USC 523(a)(2)(b). To win such a motion, you will need to document the click up mouse coming proof in the court.
To win a motion under USC 523(a)(2)(b), you would need to prove that the fraud was intentional, and that your judgment debtor knowingly and willfully provided you with false information. Some items for evidence could be a rental agreement signed by the debtor, with fraudulent statements concerning the debtor's financials.
If the misrepresentations were verbal, perhaps you could prove fraud under USC 523(a)(2)(a), however proving this is often much harder.
The first step to proving fraud at court is discovery. There are several paths available for the creditors of bankrupt debtors. When debtors file for bankruptcy protection, their financial privacy vanishes.
The way to win a bankruptcy complaint for fraud, is plenty of discovery and hard evidence proving fraud. The first step is to ask the lawyer representing the bankrupt debtor for the judgment debtor's filing information and disclosures, liability and asset statements, and listings that itemize their monthly living expenses.
One way to go, is to request copies of the debtor's tax returns at least two weeks prior to the first scheduled meeting of creditors. You might ask for 5 years of state and federal tax returns, or tax returns from a few years before and after the fraud happened.
Depending on what response you get, you might decide to motion the court for a rule 2004 examination of your debtor and perhaps some other 3rd parties, possibly right after, or perhaps before the first creditor's meeting.
If you have a crooked debtor, they often try to stonewall and hide information from creditors. Once the debtor files for bankruptcy protection, you are entitled to get their financial documents, so that you can comprehensively research the debtor's actual situation.
If you are deprived from performing your discovery in bankruptcy court because of interference by the judgment debtor, then you might have a cause of action in an adversary proceeding under USC 727, which costs around 300 dollars to file.
Bankruptcy court could be like "heaven" for creditors with time, knowledge, and patience. Bankruptcy courts aren't perfect, and most will not allow mortals (non-lawyers) pay by check.
Bankruptcy courts are usually more comfortable and spacious than state courts. Most motions and filings (except motions for relief and adversarial proceedings) cost nothing to file. Cafeterias in bankruptcy courts are often reasonably priced and good.
You may be able to have the debtor kicked out of court for either not providing you with their income tax returns you asked for, or possibly for bad faith filing because of not complying with the court's order to bring in documents under a rule 2004 exam.
Depending on the size of your judgment, you may conclude it's just not worth filing an adversary action. You may also discover that the debtor really does deserve to file for bankruptcy protection as they showed you all the documents you requested, and you found no evidence of fraud or deceit.
