Legal Question in Bankruptcy in New Jersey

Re: Bankruptcy and a civil suit

THE INFORMATION PRESENTED HERE IS GENERAL IN NATURE AND IS NOT INTENDED, NOR SHOULD IT BE CONSTRUED, AS LEGAL ADVICE. THIS POSTING DOES NOT CREATE ANY ATTORNEY-CLIENT RELATIONSHIP BETWEEN US. FOR SPECIFIC ADVICE ABOUT YOUR PARTICULAR SITUATION, CONSULT YOUR ATTORNEY.

When someone files for bankruptcy, they are asking a court to issue an order that prevents their properly listed creditors from coming after them to collect money from them. If the court grants the petition, the creditor can never initiate any collection attempt against the debtor without risking the ire of an Article I judge (the bankruptcy judge).This is not something anyone wants to do..

If a creditor holds a pre-bankruptcy money judgment against a debtor and that debtor files for bankruptcy, the debtor can ask to have the judgment averted (judicially satisfied) in the bankruptcy proceeding, and the court may or may not grant that request. If the bankruptcy court does not grant the request to avert, the debtor can, in New York (I can't speak to other states), often get the judgment averted in the state courts once the federal case has discharged; it's just a bit more time-consuming. I often include the state petition as an add-on service for a client who has a judgment against them and chooses to file for bankruptcy protection.

Once a bankruptcy petition is filed that lists a creditor, that creditor can no longer go after that debtor to collect the debt. There is an automatic stay on all collections activity against that debtor, even before any discharge is granted. A creditor can petition the bankruptcy court to lift the stay as to that creditor in certain circumstances.

You need an attorney who works with creditors' rights in bankruptcy situations. That isn't me (I represent debtors when I do bankruptcy work), but there are several in the Albany area who do. Good sources of referrals are your family, friends, and business associates, and/or the Albany County Bar Association (www.albanycountybar.com) and/or the New York State Bar Association (www.nysba.org).

Good luck.