Legal Question in Bankruptcy in California
We were sued by my mother and settled out of court for 40,000.00. We still owe her 10,000.00. We are in process of filing bk...can we include this 10,000.00 in the bancruptcy?
4 Answers from Attorneys
The bankruptcy court will be more than happy to help you stiff your Mom, unless the subject matter of the lawsuit was for something nondischargeable in bankruptcy such as fraud, drunk driving, or an intentional tort such as battery.
You must list all of your debts in your bankruptcy.
In addition to what my colleagues state, the bankruptcy trustee might actually reach back for up to a year of payments and make your mother disgorge them -- or at least a portion of them -- to pay your other creditors. Those payments would be considered a preference.
Hello:
If the debt is not secured, it would be an unsecured debt and should be dischargeable.
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