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If a person is being sued for forging a quit claim deed can bankruptcy be used to stop the lawsuit and any settlements?

East Saint Louis, IL |

If a person is being sued for forging a quit claim deed can bankruptcy be used to stop the lawsuit and any settlements? And what would be the proper attorney to contact in this type of lawsuit? Also based on the evidence presented so far the Plantiff's attorney has a strong case against the Defendant with the help of numerous contradictions in the Defendant's deposition. The defendant has consulted a bankruptcy attorney who has assured them that everything will stop because the case will be tied up in bankruptcy court. IS THIS LEGALLY TRUE OR IS THE DEFENDANT HEADED DOWN A PIPE DREAM?

Attorney Answers 3

Posted

Although a bankruptcy filing can stop a lawsuit of this nature, it is likely that the lawsuit will simply reappear in bankruptcy court as an Adversary Proceeding asking that the discharge be denied. Bankruptcy Court usually moves much more quickly to trial than civil court, so assuming that the Plaintiff can find an attorney that isn't afraid of bankruptcy court, I see the Defendant shooting himself in the foot with this strategy.

Of course, bankruptcy won't stop the process of any criminal charges, just civil ones. Hope this perspective helps!

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Posted

A charge of forging a deed sounds in fraud and that type of claim is not dischargeable in bankruptcy.

So, if the defendant files, the automatic stay will temporarily stall the state court proceedings - but as my colleague indicates, the plaintiff will move either to lift the stay or an adversary proceeding within the bankruptcy court to declare the claim as non-dischargeable.

If this answer was helpful, please mark it as helpful or as a best answer. This answer is for general education purposes only. It neither creates an attorney-client relationship nor provides legal guidance or advice. The answer is based on the limited information provided and the answer might be different had additional information been provided. You should consult an attorney.

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Posted

The notion of the defendant filing a bankruptcy case is not a pipe dream. If a case were filed, the automatic stay would stop the litigation. The debt would be non dischargeable under 523 of the Code. However, the defendant would have to be sued in the bankruptcy court to have the court determine that the debt was non-dischargeable. The suit in the bankruptcy court against the Defendant MUST be filed by the deadline set by the court. The finding of fraud in one instance is not alone enough to prevent a discharge from being granted. This means that if a bankruptcy was filed and an adversary proceeding against the debtor was not filed by the deadline, the debt from the forged deed would be discharged, In addition, if the trial in the state court is not completed when a bankruptcy case was filed, the fraud would need to be proven to the bankruptcy court in order for the court to find the debt non-dischargeable. For these reasons, it is important that you monitor the defendant's actions. If the defendant files a bankruptcy case, action must be taken to prevent the debt from being discharged.

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