question about a stipulation settlement

[rooster0330]

We reached a settlement on the suit that was against us. We are only doing it to buy some time before we file, which should be a few weeks. My husband says that the paperwork (settlement stipulation agreement) states we agree to pay the debt, he is reading this to mean that we couldn't include it in our chapter 7.

The paperwork, says nothing about the debt not being dischargable, it says nothing about bankruptcy. So, I think this is just the verbage, that we agree to pay the debt as follows and then the payment plan.

Any insight would be great!

[IamOld]

Hello! Yes the stipulation states that you agree to pay the debt. No differently than the original contract with the creditor. When you file, whomever owns that debt, becomes a creditor like anyone else. NO different!!!

[frogger]

The old man is right. The debt can be discharged in your chapter 7.

[rooster0330]

Thanks!!! Thats what I thought I just wanted to make sure we weren't hurting ourselves by agreeing to the settlement temporarily

[treehugger1]

Hmm, You suggest that you are willing to stipulate (promise to pay) an agreement when you know you are going to declare bankruptcy in a few weeks. In other words, you are agreeing to a settlement that you have no intent to make payments on. If I were you, I would post your question over on the BK 7 threads. The last thing you want to suggest is any type of intentional misconduct that might be construed as fraud. I think there was some kind of Supreme Court case (Warner?) related to the discharge of debt obtained fraudulently. If this were me, I would certainly speak to my bankruptcy attorney before I would agree to anything. If you are truly only a few weeks from filing, why on earth would you sign anthing?

State laws can even weigh in on this. For instance, in some states a stipulated judgment results in a lien on real property. While the BK will discharge the debt, the lien remains. Some liens can be stripped in BK, but it ALL VARIES BY STATE. I know that this seems weird, but the effects of judgments can be quite different from state-to-state, and are not necessarily equal under the general bankruptcy codes. My advice is to seek competent legal advice. I am not a competent legal advisor.

I suggest you tread lightly here. What you should hope for is that someone with personal experience in a BK 7 in your state will come forward with comments. Regards, TH.

[rooster0330]

Thanks!! I have an email into our attorney now asking him. I will update when he gets back to me.

[GoingDown]

I agree with Tree. Since you are so close to filing bk, I wouldn't do anything. Just stay on target and file bk as soon as possible.

And if I wasn't going to file bk, there is no way I would sign anything, ever, from any debt collector. They never have your best interests at heart.

[rooster0330]

Just spoke to my attorney, he said there is no fraud or conflict with signing the settlement and still filing!

[frogger]

Just spoke to my attorney, he said there is no fraud or conflict with signing the settlement and still filing!

And he is correct. You are not making "new debt" in anticipation of filing bk, so there is no fraud. Good luck!

[car67]

Agreed no new debt is being occured its just a pawn move. Sign and move on!

[magua2]

Do NOT sign this! This consensual settlement of a lawsuit will result in a judgment and allow them to put a lien on your house and that lien will not be able to be removed in bankruptcy, because it is consensual. Similar to a mortgage. We almost made the same mistake. Many attorneys don't know this.

[rooster0330]

Do NOT sign this! This consensual settlement of a lawsuit will result in a judgment and allow them to put a lien on your house and that lien will not be able to be removed in bankruptcy, because it is consensual. Similar to a mortgage. We almost made the same mistake. Many attorneys don't know this.

Why would it result in a judgment? it is a stipulation settlement, it says nothing about a judgment ONLY in the event of non-payment, they even have the payment arrangement spelt out. Can you exlpain this to me.

[shark66]

If you're really just a few weeks away from filing, why bother signing anything?

There's not much that any lender/collector/etc. can accomplish in that period of time...

My $0.02 only...

Good luck.

[catleg]

In NJ, even if the creditor were to get a judgment, it cannot be docketed against real estate without a 'diligent search' being performed for personal property that could be seized to pay the judgment. Normally this is accomplished by making the judgment debtor fill out an information subpoena. That process can easily be dragged out for a month or two if necessary. So no worries about liens against real property, besides they can be voided in BK if they "impair your exemption" in the property (means, no equity , no problem).

[treehugger1]

In my state a "stipulated" agreement is a "stipulated judgment" in the end; the right to recourse is the same as any other judgment. And if the judgment creates a lien against real and/or personal property, then you will want to strip this lien in BK. Your mileage in your state may vary. Sounds as if your attorney knows the BK laws related to your region, so you can go with the advice. But, one more time, if you are so close to filing for BK, why even bother? If you are not close to filing, what is it you might have to hide?