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**SinkingFast** · 04-21-2007, 07:45 PM

Originally posted by j o e View Post

To make a long story shorter, I got a letter from their attorney who said I would be added as a creditor. About 1 week later I got a letter from the attorney I got a letter from the trustee stating that since I was not informed of the ch 13 filing at the time it was filed, this was unfair to me (which I agree with) and that I would not be added as a creditor.

My question is in regard to a statement on the letter from the trustee (the trustee has failed to return my phone call regarding what this means).
"Moreover, the Trustee avers that this added liability cannot be discharged, and the creditor may proceed with collection of the debt post-discharge"

Does this mean I can take my former coworker to small claims court even though they filed ch 13 or does this mean something else?

Also the money I loaned them was extra student loan money I had (I was in college at the time). From what I've read, student loan money basically has to be paid back no matter what regarding backruptcy cases. Since this was my student loan money does this help my situation any if this goes to small claims court?

Also in case anyone is wondering I live in MD, I guess most of the laws are universal, but I'm not sure.

Any help/ info/ feedback on whether I can proceed to small claims court or what the statement from the trustee means would be appreicated.

Thanks in advance.

Bankruptcy is a Federal Law. There are varying interpretations and applications from Court to Court. But it's basically one, uniform law.

It was/is your Student Loan. Your friends' BK has no impact on that. You took the Student Loans, not your coworker. You are responsible to repay the money for the Student Loan whether or not you get any money back from your former coworker.

The Trustee's comment:

"Moreover, the Trustee avers that this added liability cannot be discharged, and the creditor may proceed with collection of the debt post-discharge"

Means that the BK Court has decided your coworker cannot be relieved of this debt to you. When your coworker's Ch 13 Payment Plan is discharged, this debt will survive the BK.

Your coworker will be in a Ch 13 Payment Plan of 36-60 months. During that time, the coworker is under the protection of an Automatic Stay imposed by the BK Court. You cannot pursue any sort of collection activity during the Ch 13 Plan time period.

Once your former coworker is Discharged from BK, then you can indeed move to collect your loan. If your coworker does something that causes his/her case to get Dismissed, you would be free to pursue collection at that time as well.

So you have to wait until your former coworker's Ch 13 Plan is Discharged or Dismissed before you can pursue any collection activity.

**CATCHMEIFYOUCAN** · 04-21-2007, 08:17 PM

Even if you were to take him to small claims court, there is a big difference from winning the suit and than trying to actually collect it. Its more work and more money to try and get your money back from your coworker. I took someone to small claims court for $1000 and won by default as the defendant didn't show up. But to actually collect on the suit was a whole nuttha' pain in the butt!

Best Wishes, CMIYC

I would just kiss that money goodbye, it's a shame people do that to people !

**DeadManCrawling** · 04-22-2007, 06:55 AM

Originally posted by CATCHMEIFYOUCAN View Post

Even if you were to take him to small claims court, there is a big difference from winning the suit and than trying to actually collect it. Its more work and more money to try and get your money back from your coworker. I took someone to small claims court for $1000 and won by default as the defendant didn't show up. But to actually collect on the suit was a whole nuttha' pain in the butt!

Best Wishes, CMIYC

I would just kiss that money goodbye, it's a shame people do that to people !

One other thing. Nowhere in the letter does it describe a JUDGE's decision.

This is a letter from the trustee. You or your friend's attorney could appeal to the actual JUDGE, which is different from the Trustee, by objecting to the trustee's decision.

The fact that you did loan this money (hope you have a cancelled check or receipt) should be enough to keep you in the game-if you really WANNA be.

Two issues: If you ARE included in his bankruptcy, and depending on other creditors, who may be regarded as PRIORITY, your claim goes to the back of the line as an unsecured low priority debt. This means you could go through months of aggravation and potentially your own legal fees. All to receive the grand sum of $25.00.

Or less.

Second. As CMIYC says, the actual enforcement of a judgement AFTER CH 13 is one thing. Collecting on it completely different. You might wanna look into this further.

If this "old friend" is not really much of a friend in reality, and you don't mind hurting the friendship oyu can do this:

Pursue the judgement sometime in the 5 year period of his chapter 13. Likely, you will win, as the trustee's letter, and the friend's acknowledgement of this debt will be compelling evidence. After winning, you will have to place a lien on some of his property-against equity in his home or whatever. Then he has to either pay you to have the lien removed or you will be paid the amount of your jusdgement when the property is sold.

Someone chime in if I got this wrong. I feel like I've crammed 400 years worth of Law Study into my head in 4 weeks.

DMC

**SinkingFast** · 04-22-2007, 07:08 AM

DMC,..............

The Trustee's decision gave the OP the best possible way to stay in the game.

This particular debt is NOT Dischargeable. Which means OP can attempt to collect after the Ch 13 payment plan is either Discharged or Dismissed. Whichever happens.

If the debt was included in the BK, OP would probably only get a fraction of what was owed.

What CMIYC was saying is,............ Even if the OP does get a Judgement, in the future, post BK, against the coworker, OP may still not actually collect payment of the debt.

"But to actually collect on the suit was a whole nuttha' pain in the butt!"

**DeadManCrawling** · 04-22-2007, 10:08 AM

Originally posted by SinkingFast View Post

DMC,..............

The Trustee's decision gave the OP the best possible way to stay in the game.

This particular debt is NOT Dischargeable. Which means OP can attempt to collect after the Ch 13 payment plan is either Discharged or Dismissed. Whichever happens.

If the debt was included in the BK, OP would probably only get a fraction of what was owed.

What CMIYC was saying is,............ Even if the OP does get a Judgement, in the future, post BK, against the coworker, OP may still not actually collect payment of the debt.

"But to actually collect on the suit was a whole nuttha' pain in the butt!"

You said it better than I could have. End result, the debtor friend could still object to Trustee's exclusion of the debt. If a judge affirms, and includes the debt in the BK, he will get pennies back rather than the original $2500 loaned. If he gets anything at all, that is.

If it is kept OUTSIDE the bk, he can get a judgement any time(within statutes of limitations), which may or may not be collectible since most BK debtors have nothing to place a judgement lien against anyway.

**CindyLou** · 04-22-2007, 10:41 AM

This debt is not protected by the automatic stay. You can and SHOULD pursue legal action at this time. If a judgement is received you still have a chance at getting your money. This happened to my brother and the creditor was able to garnish his wages even though he was in a BK 13. Many small claims are now easy and not that expensive. If in, in fact this person is trying to get their finances straight it is probable they will work on paying an outstanding judgement. Go for it!!

**SinkingFast** · 04-22-2007, 06:10 PM

There are exceptions to the Automatic Stay, but this doesn't sound like one of them.

Criminal offenses, establishing paternity, child support, alimony, the IRS, a Landlord from completing a Lease eviction.

http://www.lawdog.com/bkrcy/bkcp7e.htm

**CATCHMEIFYOUCAN** · 04-22-2007, 06:35 PM

To me its just sounds like a personal debt (a friend lending money to a friend). In the end after all said and done, its seems it would be more hassle than its worth - just beat em' up !

**CindyLou** · 04-22-2007, 06:44 PM

The automatic stay only applies to the debts listed on the chp. 13. the debtor did not list this debt, therefor losing the protection of the automatic stay for this debt.

**SinkingFast** · 04-22-2007, 07:24 PM

I am not an attny, but I certainly don't see where the Code specifies the debt has to be listed as part of the BK Petition or the Stay does not apply.

http://doney.net/bkcode/11usc0362.htm

**DeadManCrawling** · 04-23-2007, 12:16 AM

Originally posted by SinkingFast View Post

I am not an attny, but I certainly don't see where the Code specifies the debt has to be listed as part of the BK Petition or the Stay does not apply.

http://doney.net/bkcode/11usc0362.htm

GAAAH!!

I hate reading legalese

**spell** · 04-23-2007, 10:33 AM

If I were in your shoes, I'd read up on the details of his bankruptcy to see why he's filing a chapter 13.
There are a few flavors
- Foreclosure fighters
- High Income earners
- Asset protectors
This will give you an idea of if/how to collect once the time comes. It'll also give you an unprecedented view into his life. If he's filing because of assets, you can end up attaching those. If he's filing because of income, you'll garnish.
If he's filing because of foreclosure, I'd forget about it, you'll be throwing good money after bad. IMHO

**j o e** · 04-23-2007, 04:13 PM

Thanks for all the info everyone has provided. It is greatly appreciated.

**j o e** · 05-15-2007, 03:56 PM

I just received a letter from the bankruptcy court stating that the lawyer for the person who owes me the money is going to try to have me included in the repayment plan by going back to the bankruptcy court for another hearing. My question is, should I attend this hearing or would my attendence not make much difference?

Thanks

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