Legal Question in Credit and Debt Law in California
I am getting ready to file BK. One of my debtors is suing me. I have the option of going to court or paying an out of court settlement. If I go to court and let them sue me, can I include that in the bk or should I try and pay the settlement. I am very confused.
2 Answers from Attorneys
if you are going to file bankruptcy you ought to just go ahead and do it. Why settle a case that can be discharged in bankruptcy. Talk to a bankruptcy specialist to see if BK is a good idea for you.
A bankruptcy filing stops all lawsuits in their tracks and puts them on hold. If the bankruptcy then proceeds normally and a discharge is entered, the lawsuit must then be dismissed. So if you qualify for bankruptcy, there is no reason to settle out of court or even to wait to be sued by a creditor (you are the debtor; they are the creditor).
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