Desperate for HELP with Bankruptcy and Lawsuit!!!!

[dbleblanc]

I am currently in a civil lawsuit that we are scheduled to go to court for in 4 weeks. We expect this to go against us and also suspect a judgement filing against us. The lawsuit stems from my teenage son breaking the law 3 years ago. And now the civil lawsuit is against us in a very bad way.

I have been reading alot over the internet and my husband met with a bankruptcy lawyer yesterday. We were told by our lawyer before yesterday that once we file everything would stop and filing bankrupt would make this go away. And yes we would be able to keep our home. So today what I have learned is that the information I was told was very incorrect. So here I am very late in the lawsuit now trying to figure out what my options are. Of coarse I want to keep my house and vehicles. But now I am afraid that it may not be possible.

I live in Louisiana, I have a mortage if $575 per month with a balance of $65K, the home is most likely worth about $95K, we have about $9K in credit card debt, $1K on a student loan, two vehicles that are both paid for and each worth about $2K -$4K book value, monthly expenses/food/clothes would run about $1400, we are a family of 5, I have a daughter that is a full time college student and works part-time (minimum wage) and I am a SAHM. After the court date and the ruling we are looking at a $60K+++ debt added to us. It is highly possible that we will also have a judgement/lein filed against us in addition.

So with that said, can you give me any direction on how to file, or any information that will help me better understand how something like this works?

Based on reading/research here is what I have come up with as my options. Please correct anything that I have wrong. Here is how I understand my options to be at current time:

1. File chapter 13, this will put us on a 5 year payment plan but will allow us to keep our home and from what I understand will NOT get rid of a judgement. Which could cause problems later.
   
2. File chapter 7, lose everything and also get rid of a judgement. Also will put me at risk of being sued again by the same people for the same case at a later date.
   
3. Don't file bankrupt and sell home only to aquire about $30K to put towards the whatever ruling the judges gives us and take out another loan to pay the remainder which could still be $60K+. Again could cause bankruptcy later on. We would be starting over on a very small budget this way.
   
4. Take out a new load now and hire a new lawyer to take over/represent our current case that also specializes in bankruptcy. This way he is paid by us and has our best interest in mind. We are currently being represented by a court appointed lawyer due to finances. I am not sure it this would be too late in the game for this.

Please let me know if you need more info. I am really confussed as what to do. I do realize that nothing can be decided until the ruling is handed down and we know exactly what we are looking at, but I am trying to explore all of my options before something passes me and then it is too late.

Thanks for any info or help that you can give!

[dbleblanc]

Basicly I am just trying to figure out just how screwed I will be. I don't know anything about this. I don't know if, how or when a judgement can be filed. I don't know if I even care anymore.

Finding information is just like talking to my dog that does not answer me back.

[JeepMom]

My judgement was settled long before I filed. Sorry, don't know what to tell you.

[anonymuse]

Most BK consults are free. Look for a few BK lawyers that handle more than just BKs and get more advice.

You're case sounds complex so I don't want to venture an opinion on it based on the judgement.

If you're son's judgement has an injury claim involving drugs or alcohol, it cannot be discharged.

[alh]

Getting a judgement and collecting a judgement are two very different things. You may not be on as short a fuse as you think.

[SinkingFast]

About the only thing we can tell you for sure is, as you suspected, that attny did lie to you. You cannot file now and make everything go away.

The New Law expressly forbids debt incurred as the result of negligence, accidental injury settlements/judgements, and as Anon said, Drugs and Alcohol, from being discharged.

If you were to file now, the only thing you'd get would be a reprieve. The Law Suit would be stopped temporarily under the Automatic Stay that goes into effect when you file BK. Most likely, the plaintiff's attny would file for a Motion to Lift Stay so the trial could proceed on it's course. And, quite probably, the BK Court would grant that Motion.

The more you wrangle around, the more you run up their legal tab. Most likely, if you do wind up loosing the law suit, they will win a cash $$ amount award plus all costs. So if you make their attny do more work, costing more money, you're really just costing yourself more money in the long run.

Have you tried to settle with the other people out of Court? Maybe they would agree to less than they might win if the Suit goes to trial. You could deal with getting them paid somehow and then file BK. It's just a thought. I don't know if it's even feasible.

I know how you feel about having lost everything. We have too.

[SinkingFast]

Getting a judgement and collecting a judgement are two very different things. You may not be on as short a fuse as you think.

True. Very True, ALH.

You cannot get blood from a turnip.

The plaintiffs cannot collect on monies you do not have to pay.

[dbleblanc]

Most BK consults are free. Look for a few BK lawyers that handle more than just BKs and get more advice.

You're case sounds complex so I don't want to venture an opinion on it based on the judgement.

If you're son's judgement has an injury claim involving drugs or alcohol, it cannot be discharged.

OK... I know it is complex which is why I am having some much trouble finding some answers. I have a lawyer that is representing my current case and he does not specialize in BK. So we met with a BK lawyer and I still have these questions. I am making another appointment with another BK lawyer like your advise that can give his best opinion on both sides of this issue. I hope!

Here is were I am stumped: There is no judgement at this current time. I don't have a clue how that works or even comes about. I was speaking "IF" they file a judgement against us how would that affect my filing BK chpt 13??? I also listed a few options as I believe it to be correct but I am not sure if I am understanding correctly. I was hoping that someone could say yes your are correct and that is how chpt 7 and chpt 13 will basiclly work OR no you have it all wrong and still do not understand what you are talking about!! See?

I dont' understand how BK and a civil lawsuit come together in the end. I was always told that if you are in a civil lawsuit and you file BK then everything stops. I don't know were that information comes from because I can not find anything to back that up to be true.

As for my son... no drugs/alcohol and no judgement on him either. He had his case/sentencing aready and case is closed. The current case is agains my husband and I because of damages my son caused. This was vandilium/intentional damage to someone's property. My insurance is refusing to cover based on that reason. My insurance is also being sued as I am too. My insurance has filed a motion to get out of the suit. No word on that yet. They seem to have a solid case in that they just may get out of this leaving us to be fully responsible.

This will all come down to how the judge rules I understand and that my questions and worries are solely based on IFs at this current time. But I am so stressed that I just would like some sort of understanding and time to prepare myself for what is now just 4 weeks away.

I know it is not an easy question(s) but if anyone can share any kind of information to easy my mind. I swear I will be a chain smoker and an alcoholic or a basket case before I get to court.

[JeepMom]

Read the replies dear.

If you were to file now, the only thing you'd get would be a reprieve. The Law Suit would be stopped temporarily under the Automatic Stay that goes into effect when you file BK. Most likely, the plaintiff's attny would file for a Motion to Lift Stay so the trial could proceed on it's course. And, quite probably, the BK Court would grant that Motion.

The more you wrangle around, the more you run up their legal tab. Most likely, if you do wind up loosing the law suit, they will win a cash $$ amount award plus all costs. So if you make their attny do more work, costing more money, you're really just costing yourself more money in the long run.

[SinkingFast]

I'd say, since your son was "convicted" the plaintiff's attny has substantial evidence for the Civil claim against you. Some sort of award is fairly certain there. Just how much is the question.

What State do you live in?? Exemptions vary State to State. Some States allow for use of Federal Exemptions. Some don't. That could or could not get you bigger allowances in certain areas.

We'll have to look to see if you can pay a Judgement Debt from a Law Suit as part of your Ch 13 payment plan. This may be one of many areas not expressly addressed by the New Law and there's no ruling yet from another case to set presidence for how it's to be handled.

[dbleblanc]

OK... those post were not there until after I made my post. And I can see that filing now would not be in my best interest. I did not plan on filing now, I am aware that I do have to wait until after I actually aquire the additional debt from losing the lawsuit. I don't mean to sound like I am jumping the gun but I just want to see were I am going and make sure that I know what I should know before I get there.

Additionally, it would help to get a better understanding of this so that when I do meet with the next BK lawyer I can ask the right questions this time. The last time I was so clueless that I did not know what to ask. So I walked away with the information they offered and now I still don't understand. Sorry for the confusion. Just an example of my state of mind. Don't mind my stupidity!

[dbleblanc]

I live in Louisiana. And please note that to my knowledge there is no judgement at this time. But I am worried that this will become part of this at some point in time.

[anonymuse]

Dbl, I hope you didn't think I was prying into the case--I just wanted to state what was not dischargeable so that you could determine on your own (without having to post it on the board) whether there was even a chance of being discharged.

There are forums on http://community.lawyers.com/messageboards/list.asp which is staffed by lawyers that might be able to help.

There's a lot of "what ifs" in your case which makes it hard to respond to even though we'd love to help and have an answer to everything.

Write down these questions ahead of time for the lawyer--don't count on your memory for when you go there. Put all those "what ifs" on paper.

[dbleblanc]

Dbl, I hope you didn't think I was prying into the case--I just wanted to state what was not dischargeable so that you could determine on your own (without having to post it on the board) whether there was even a chance of being discharged.

There are forums on http://community.lawyers.com/messageboards/list.asp which is staffed by lawyers that might be able to help.

There's a lot of "what ifs" in your case which makes it hard to respond to even though we'd love to help and have an answer to everything.

Write down these questions ahead of time for the lawyer--don't count on your memory for when you go there. Put all those "what ifs" on paper.

NO, I didn't think that at all. Not sure what I said to make you think that either. I am just so confused. The lawyer will wish I never showed up!

OK... lets try this as in a general question, NO IFs and not related to me or my case:

Here is my grey areas (of understanding):

filing BK (chapter 13) after acquiring court ordered $$ payback, will this be considered dischargeable debt? Just in general can you answer yes or no? I have not been able to find any information related to civil lawsuit and BK.

The other thing that is in the back of my mind is at the time of a BK filing (chpt 13) can a judgement be filed against me? If so, what does that mean and how does it change things?

Sorry I just had to try again - hope you don't mind! I don't know if maybe it is just me not asking the right thing or if I ask too much or if there is just no right answer. I understand the if(s) make it hard. Sorry!

[SinkingFast]

In the quick searching I've done, I've learned that your pending Judgement is not Liquid until it is perfected.

That means, the $$ amount is at this point in time unknown. A car loan is liquid because you can call the Lender any time and ask for a pay-off amount.

And the debt is not collectible until the Law Suit is settled and the plaintiffs file the Judgement with the Court House. They have to dot all their i's and cross all their t's and file the paperwork properly for the Judgement to be perfected. Until that time, you do not legally owe the debt.

Also, according to Federal Law, this debt is not gonna be dischargeable in BK. Because the debt arises as the result of a criminal act, it cannot be discharged. While Federal BK Law governs, Louisianna Law does come into play as well. If there's a Law in Louisianna that would allow for debt incurred due to an act of vandelism/criminal behavior by a minor to be discharged, then you may be able to discharge the debt.

One suggested strategy I read was to file Ch 7 BK before the Judgement is perfected. Discharge everything you can discharge in Ch 7. Once the Judgement Lien is perfected, then you'd file Ch 13 to pay the priority debt. There could be a problem filing Ch 13 if you do not have sufficient disposable income to pay the debt in full. The Creditor could object causing your plan to not be accepted. However, if your plan is accepted and confirmed, you could actually wind up paying less than the full amount of the Judgement. The Creditor would get whatever you could afford to pay thru the Ch 13 plan, and the remainder would be discharged once you complete your plan payments.

We completely understand you wanting to prepare yourself.

As Anon suggested, you might post on the other Forum. Your situation is very complicated and really beyond the scope of many of our personal experiences. While we do have a few law students frequent the Forum, by and large, most posters here are just regular folk sharing how things were done in our own cases.