From The Creditor Side - Can Filing BK Discharge Debt That Does Not Yet Exist?

[BaseballFan2004]

Hello:

I am asking this question from the creditor side of the fence. I have sued a former friend in small claims court for not paying back a loan. This case has not gone to trial yet, so there is no judgment. I received a call yesterday from the court clerk saying that the case is "on hold" because the defendant has filed bankruptcy.

My question is: Can a BK essentially wipe out a debt that does not even officially exist yet? There was/is no contract between us, only e-mails where she admits that she owes me the money.

Interestingly, she responded to my small claims filing and showed up for pre-trial mediation. If she had not done that, then I would have won a default judgment on June 4. We were not able to come to an agreement on June 4, so the small claims trial was scheduled for late-July.

If she knew she was going to file for BK anyway, shouldn't she have just let me get the default judgment?

Will she be able to get this debt to me discharged via BK even though the debt doesn't even "officially" exist as of yet?

[AngelinaCatHub]

I have a similar situation. I have a very bad person bent upon my destruction make an Adversary Protest against my bk. He has a five year old suit against me, that was dormant of action for over a year. Now as he knows I cannot afford his bogus complaint, he is attempting to take my bk down, then finish the suit that I cannot afford to defend against. The AP is for 180 million dollars, get that? Sure he says I defamed him and stole and published an email of his requesting that I be fired from where I work. I got a copy of it a spammed it to the World.

Remember, a civil suit is only for money. If you are bankrupt and have an open case what good is the suit for and I believe the Judge can cause the suit to become null. I’m not an expert on this but he can’t get blood from a stone, nor can your lady friend pay you with no funds if you get the judgment. Also your hearing or trial will be on hold in any case until her bk is over. I believe you may be better off forgiving the debt as a loss and consider it good will towards her. She will have it bad enough in bk stress anyway. Only my opinion. ‘Hub

[itneverends]

Hello:

Will she be able to get this debt to me discharged via BK even though the debt doesn't even "officially" exist as of yet?

The small claims judgement does not create the debt, you loaning the money and her taking it created the debt. The debt already exists and certainly can be discharged in BK. It does not matter if you have a judgement or not, she is required to list all money owed.

The reason she showed up and prevented the default judgement was to prevent you from having enough time to get the judgement and trying to COLLECT proir to her filing.

[diviaruba]

Hello:

I am asking this question from the creditor side of the fence. I have sued a former friend in small claims court for not paying back a loan. This case has not gone to trial yet, so there is no judgment. I received a call yesterday from the court clerk saying that the case is "on hold" because the defendant has filed bankruptcy.

My question is: Can a BK essentially wipe out a debt that does not even officially exist yet? There was/is no contract between us, only e-mails where she admits that she owes me the money.

Interestingly, she responded to my small claims filing and showed up for pre-trial mediation. If she had not done that, then I would have won a default judgment on June 4. We were not able to come to an agreement on June 4, so the small claims trial was scheduled for late-July.

If she knew she was going to file for BK anyway, shouldn't she have just let me get the default judgment?

Will she be able to get this debt to me discharged via BK even though the debt doesn't even "officially" exist as of yet?

Creditors have a claim on the debtor, which is most often, but not exclusively, a debt. But it can also be a right to an equitable remedy for other breaches of performance, or it could even be contingent. Look at Duke lacrosse prosecutor Mike Nifong, who filed for bankruptcy earlier this year in North Carolina. He lists contingent claims of $180 million in his filing, even though nothing has been adjudicated in that case.

So, yes, if she is filing for a 7, she will be able to get this debt discharged, along with her other debts, or if a 13, you will become a general unsecured creditor. This assumes their was no fraud issue or other factors that would lead you to take legal action for a declaration that the debt owed is non-dischargeable.