Legal Question in Bankruptcy in New York

Re: Judgment Bankruptcy

There are certain debts that cannot be discharged in bankruptcy without a very heightened showing by the debtor. Personal injury judgments are one of those types of debts (although what happens to the judgment if the debt is assigned to another I don't know). Others include debt for child support and student loan debt. This listing is not all-inclusive.

I'm not a creditors' attorney, so can't advise well as to what the creditors' responsibility would be, if any; I'd guess that it depends on the chapter under which the debtor filed for bankruptcy protection. Creditor may need to make a motion to lift the automatic stay as to that debt, or may need to file a proof of claim ... those are the things that spring immediately to mind.

Yes, of course a debtor can file a bankruptcy petition in the face of a money judgment! The underlying debt will be discharged (assuming that it is a dischargeable debt; see the first paragraph of this response) and the remaining judgment may well hang there, naked (for a year; NY Debtor/Creditor law provides that a money judgment can be averted if the underlying debt was discharged more than 1 year ago in bankruptcy). Nothing can be done to collect on the judgment if the underlying debt is discharged; if the debt is not discharged, then the debt still exists and the debtor retains responsibility for it.

Hope this helps.

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.

Re: Judgment Bankruptcy

First of all it is commendable that you are making the effort to your increase your knowledge regarding the underlying legal framework applicable to collections matters. Although its focus is commercial and not retail/consumer matters, I would encourage you to become a member of the Commercial Law League of America (www.clla.org) and attend their continuing educations programs -- they provide excellent programs on bankruptcy and creditors' rights matters.

The discharge an individual debtor receives in bankruptcy is very broad. Assuming the case was not dismissed and the debtor received a discharge, generally most debts are wiped out with certain limited exceptions (see below). Some debts are automatically excepted from discharge and others can be excepted upon Court order if the creditor files a lawsuit in the bankruptcy case prior to the deadline to obtain a �nondischargeability judgment� during the bankruptcy and obtains such judgment.

One exception to discharge is debts that are not scheduled. Generally if a debtor fails to list a creditor in the schedules to the bankruptcy petition the debt to that creditor is not wiped out.

Regarding personal injury claims, there is a very limited exception to discharge for "death or personal injury caused by the debtor's operation of a motor vehicle, vessel, or aircraft if such operation was unlawful because the debtor was intoxicated from using alcohol, a drug or another substance." Essentially, personal injury or wrongful death claims resulting from drunk driving or driving while on drugs by the debtor are not wiped out in bankruptcy.

In addition, a creditor can seek a nondischargeability judgment prior to the deadline during the bankruptcy for �willful and malicious injury by the debtor to another entity or property of another entity.� So, depending upon the underlying facts giving rise to a personal injury judgment, a creditor may or may not have grounds to seek a judgment of nondischargeability in the debtor�s bankruptcy case.

The foregoing is intended as general information of interest to readers of this website and is not legal advice for your specific situation. Facts and circumstances not disclosed in the brief summary you provided may materially affect your rights and remedies. You should consult a bankruptcy attorney regarding your matter and have him/her obtain a copy of the debtor's bankruptcy petition and schedules and review them to provide you with specific advice for your situation.

Please also visit the Frequently Asked Questions (FAQs) on our website for more information bankruptcy and debtor-creditor matters at www.starrandstarr.com/faqs.htm.

Best regards,