How does a judgement affect a Ch 7 filing?

[MtnCanary]

Hi there,
My husband and I are looking at filing a Ch7 BK soon. We are trying to get $22K in credit cards discharged, and also want to walk on our very underwater house. We would like to keep our car (just purchased), if possible. Other than that, we don't really have anything of value - just household stuff, most of it old hand-me-downs. My husband does have a substantial judgement against a previous employer for back wages. It's a few years old, and we have never been able to collect anything on it. In the meantime, the employer has "sold" his business and restarted it under a new name, so we would need to re-file in order to get it under the current business name.

How would this judgement affect our ability to file a Ch7 BK?

TIA,
MtnCanary

[AngelinaCat]

Hi MtnCanary:

Welcome to the forum. The substantial judgment won't prevent you from being able to file, but depending on the circumstances, and how tenacious the trustee is, your husband may not be able to keep any of the money, should it become 'recoverable', because the judgment will become part of your BK estate.

You will have to list this in your bk paperwork, and you will be asked at the 341, "does anyone owes you any money?" Here you will have to say "yes", and you will be asked the amount.

You indicate that you have tried to collect and been unable to. It will be up to the trustee as to whether going after it will be worth the bother.

Good luck to you!

[AngelinaCatHub]

There are many ways to attach property in a Judgment. What have you tried? Writ of attachment for his paid for vehicles, levy on his bank accounts, liens on his equipment. etc.

Welcome to the forum. 'HUB

[btbeme]

Hi there,
My husband and I are looking at filing a Ch7 BK soon. We are trying to get $22K in credit cards discharged, and also want to walk on our very underwater house. We would like to keep our car (just purchased), if possible. Other than that, we don't really have anything of value - just household stuff, most of it old hand-me-downs. My husband does have a substantial judgement against a previous employer for back wages. It's a few years old, and we have never been able to collect anything on it. In the meantime, the employer has "sold" his business and restarted it under a new name, so we would need to re-file in order to get it under the current business name.

How would this judgement affect our ability to file a Ch7 BK?

TIA,
MtnCanary

$22k in credit cards - no problem, just make sure you ahve stopped using them for at least 90 days prior to filing.

Keep car - likely no problem, as CA has a generous wildcard exemption that will cover this, especially if you are not using it for your home.

Household stuff - see wildcard exemption above

Judgement against previous employer - again, the wildcard exemption may help, but untangling this mess seems to be a lot of effort (speaking from experience). You may have, as earlier suggested, a better route in getting this back via lien, etc. Not my area of expertise. I suggest that you consult a BK attorney regarding what the exemption would cover and whether these wages are worth the effort. Certainly, if anyone can get them broken loose it would be a BK Trustee! A-Cat's suggestion is perfect.

[MtnCanary]

There are many ways to attach property in a Judgment. What have you tried? Writ of attachment for his paid for vehicles, levy on his bank accounts, liens on his equipment. etc.

Welcome to the forum. 'HUB

The whole matter is kind of complicated. The original judgment is against Company A. Owner declared personal bankruptcy, and protected his personal assets by claiming they belonged to the company. (Sound crooked yet? It gets better.) Company A then declared bankruptcy, with much of its property being protected by being claimed as personal property, or by being owned by Owner's wife. Owner then starts Company B, which is the same time of business, in the same property, with the same vehicles and equipment. Because of Owner co-mingling company and personal accounts/assets, we were able to get Owner and Company B attached to the judgment. Problem is that we need a liability of successor or something like that done to get those entities named on the judgment itself. That's where we are stalled out. We can't find an attorney who wants to deal with it all, and it's a bit more than we understand how to file pro se.

In the meantime, we have liens on equipment and vehicles owned by Company A. I believe we also have a writ of attachment, but he's gotten rid of a lot of equipment and it the writ hasn't done us any good. Our local banks have informed us that they will not honor a bank levy attempt. We haven't seen a penny of this money, and I doubt that we ever will.

Thanks,
MtnCanary

[btbeme]

We haven't seen a penny of this money, and I doubt that we ever will.

Yup.

You may be able to score a Pyrrhic victory by bringing the details of this mess to the attention of an aggressive take-no-prisoners (ATNP) Trustee. Federal scrutiny usually results in night sweats and an uncomfortable feeling of personal invasion by a size 12 boot in a size 4 orifice. However, the ATNP Trustee is a rare breed these days since business is steady and low hanging fruit abounds.

Regardless, disclosing the "money owed" is a critical component of a successful Ch 7. And, Karma is real. I discovered today that a former business partner who took $120k cash from me and my friend four years ago not only lost his patent lawsuit but also his Ch 11 discharge when he was less than honest in his filing. Ch 11 is an expensive lesson at any level - and he now has his pants around his ankles. Karma, baby, karma.

[justbroke]

Absolutely btheme. There are a lot of zealous Trustees who would take that "money owed to debtor" judgment and run with it. Trustees can be very aggressive when it comes to recovering "property of the Estate"!

[btbeme]

Just be sure that the rest of your file is clean. Once you wave that red flag in front of the bull you had better be prepared for what the bull does next.