Can I still file BK after losing a court battle?

[JimmyNeutron]

State: California

Hi,
My wife small business went belly up during these hard economic time and she was force to shutdown the retail store this past summer. The landlord wants to collect $27K to settle. Unfortunately, she nor I have this kind of money since all of our money was invested into her retail store.

What I wanted to know is if the landlord decideds to sue us in court and assuming we lose the court case and the landlord wins a judgement against us, could my wife and I(if needed) still file for bankruptcy protection AFTER the court loss? Our assets isn't much since our house is underwater and is in foreclosures. Our bank accounts are pretty much dried up also and living somewhat paycheck to paycheck each month.

Another thing that I thought she could do is just ignore the landlord repeat attempts at collecting since we have no money. After 4 years, which is the statute of limitations on a signed lease, she's free of the debt and 7 years later, it will be erase from her credit report.

In any event, what is the likelyhood of the landlord suing us? Doing a credit check on us will show the house mortgage is late and house underwater. I would imagine it cost the landlord more money to sue us and get nothing from us at the end.

Thank You!

[MSbklawyer]

Hi,

What I wanted to know is if the landlord decideds to sue us in court and assuming we lose the court case and wins a judgement against us, could my wife and I(if needed) still file for bankruptcy protection AFTER the court loss?

Thank You!

Sure. In fact, that's what most frequently pushes otherwise reluctant people into filing bk: A creditor gets a judgment against them and is beginning to take steps to collect.

[frogger]

Our assets isn't much since our house is underwater and is in foreclosures. Our bank accounts are pretty much dried up also and living somewhat paycheck to paycheck each month.

Thank You!

And since you have no assets to seize, then the only real concern from the judgement would be garnishment (if allowed in your state). Perhaps you should hold off filing for a time to see how things work out.

Good luck.

[JimmyNeutron]

Thanks everyone! I added California to my original posting in case someone is familar w/ California's laws.

[catleg]

Think of it like this: a judgment turns an unsecured debt into something more tangible, a legal claim against any current or future assets or earnings of yours that can be identified. And it enables the power of the state in the process of collecting. Unless he's broke himself I'd imagine the landlord eventually sues you and then sells the judgment or tries to collect on it himself. In most states the civil courts are designed to facilitate this process, when invoked by real claimants with real claims, because it serves justice, it's good for the economy, etc.

The way that the system has been twisted by the debt collection/debt purchasing industry is another story entirely.

That stuff all happens in state court, bankruptcy being a federal court takes precedence.

[jribe]

ignoring it- will not work; unless the landlord doesn't want his 27k back. They would likely sue you- and then get a default judgment against you if you don't fight it. And since it sounds like you owe the money, there doesn't seem to be any way you could win it, even if you showed.

If they get a judgment against you, your assets can be attached. Wages can be garnished, bank accounts attached, among other remedies.

So i would not suggest ignoring this.

You could file BK and include the 27k owed to the landlord before he files suit. He would be a "creditor" that you owe the back rent to.

You may wish to discuss with an attorney if there are other issues.

State: California

Hi,
My wife small business went belly up during these hard economic time and she was force to shutdown the retail store this past summer. The landlord wants to collect $27K to settle. Unfortunately, she nor I have this kind of money since all of our money was invested into her retail store.

What I wanted to know is if the landlord decideds to sue us in court and assuming we lose the court case and the landlord wins a judgement against us, could my wife and I(if needed) still file for bankruptcy protection AFTER the court loss? Our assets isn't much since our house is underwater and is in foreclosures. Our bank accounts are pretty much dried up also and living somewhat paycheck to paycheck each month.

Another thing that I thought she could do is just ignore the landlord repeat attempts at collecting since we have no money. After 4 years, which is the statute of limitations on a signed lease, she's free of the debt and 7 years later, it will be erase from her credit report.

In any event, what is the likelyhood of the landlord suing us? Doing a credit check on us will show the house mortgage is late and house underwater. I would imagine it cost the landlord more money to sue us and get nothing from us at the end.

Thank You!

[JimmyNeutron]

Thanks everyone! My wife and I will probably let it go to court and see if we can win the case. We're hoping the verbal agreement the landlord made and never deliver upon will be upheld in court.

The landlord stated a specific tenant was moving in and my wife and I decided to open up the business at the strip mall because of this specific tenant. We anticipated the foot traffic would be good when this specific tenant moves in. Unfortunately, that tenant never moved in and they signed the lease before we did.

I'm guessing in cases like these, there is no jury trial? Anyone know?

It would be nice to have a jury trial so the jury can hear our side of the story. It's not like we're walking away on purpose. We survived for a year with the strip mall ONLY at about 20% filled!!! We were the last tenant to move in. Two other tenants left too and all the other tenants are mad/upset/disappointed/etc... that the landlord did not try hard enough to promote the plaza or bring in foot traffic like they promise there would be.

Thanks again everyone!

[jribe]

it's most likely a breach of contract case. That means it's just a hearing with a judge. Most likely the plaintiff will move for summary judgment because you signed a lease; and then breached terms of that lease.

You could always wait and see what causes of action they list. Then try and figure something out.

Thanks everyone! My wife and I will probably let it go to court and see if we can win the case. We're hoping the verbal agreement the landlord made and never deliver upon will be upheld in court.

The landlord stated a specific tenant was moving in and my wife and I decided to open up the business at the strip mall because of this specific tenant. We anticipated the foot traffic would be good when this specific tenant moves in. Unfortunately, that tenant never moved in and they signed the lease before we did.

I'm guessing in cases like these, there is no jury trial? Anyone know?

It would be nice to have a jury trial so the jury can hear our side of the story. It's not like we're walking away on purpose. We survived for a year with the strip mall ONLY at about 20% filled!!! We were the last tenant to move in. Two other tenants left too and all the other tenants are mad/upset/disappointed/etc... that the landlord did not try hard enough to promote the plaza or bring in foot traffic like they promise there would be.

Thanks again everyone!

[catleg]

Sounds like the landlord is likely to be in BK court before you.

[JimmyNeutron]

Actually, the landlord have already filed BK and the bank that loan them the money, is now the new landlord. We got notice the place was going into foreclosure back in Nov/Dec of 2008. The bank was trying to sell the place, but, no buyers; not surprise at all that there was no buyer for the strip mall.

So, since the bank can't sell it yet, they became the landlord.

[JRScott]

Actually, the landlord have already filed BK and the bank that loan them the money, is now the new landlord. We got notice the place was going into foreclosure back in Nov/Dec of 2008. The bank was trying to sell the place, but, no buyers; not surprise at all that there was no buyer for the strip mall.

So, since the bank can't sell it yet, they became the landlord.

If he already filed then you could become a target of his trustee since you owe the estate money. It might not be a bad idea to check out 3-5 bankruptcy attorneys in your area and see what your options might be so that your ready when you need to be.