Legal Question in Credit and Debt Law in California

Re: Dealership bankruptcy

While the auto dealership is in bankruptcy, you cannot take them to small claims court. You should have received notice of their bankruptcy filing, and in that notice is a warning from the Bankruptcy Court that you may not take any action against the debtor without Bankruptcy Court approval. You can file a proof of claim with the Bankruptcy Court, but be prepared to prove that claim in the Bankruptcy Court when the debtor (the auto dealership) fights it. If the dealership filed a chapter 7 bankruptcy (sounds like they probably did), and it is projected that there are no assets to sell to pay creditors (read the notice from the court), then you will probably never recover anything from them. If they filed a chapter 11, you might get some portion of what you are owed, but only if you file a proof of claim. Good luck - that's a horrible thing to have happened.

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Re: Dealership bankruptcy

If they're bankrupt, they're protected by bankruptcy law against small claims lawsuits. You need to file a claim with the bankruptcy court, and possibly an adversary proceeding to establish the fraud thus rendering the debt non-dischargeable in the bankruptcy. You will probably want to also go after the principals of the dealership, who are probably also BK, in the same manner.