If i have a judgement from someone and they file bankruptcy do they still have to pay the full amount or will i lose it all.

Asked over 4 years ago - Wausau, WI

i have a judgement against a business that was granted in december 2009. now this business is thinking of filing bankruptcy. i was asked if i would take half the amount because in bankruptcy will clear it.

Attorney answers (2)

  1. Ellen Lorraine Patton

    Contributor Level 10

    Answered . If they file a bankruptcy, your only relief will likely come from any funds that go into the bankruptcy estate (if any) and you will have to share that pot with all the other creditors, so your best chance then may be a percentage of what you are owed. I am not sure it's fair for them to ask you to accept 50 cents on the dollar without them disclosing their whole picture (all assets vs. how much other debt they have). Depending on how much your judgment is for, it may be worth your time to go see an attorney who specializes in creditor's rights to help you through this.

  2. Andrew Daniel Myers

    Contributor Level 20

    Answered . Attorney Patton's advice is correct. I would only add that you should keep your eye on this and make sure that your judgment is correctly scheduled on their bankruptcy petition, that you file a proof of claim, that you go to the creditor's meeting, and otherwise pursue your rights.

    It is really up to you to decide if one-half now is worth it. It may well be, depending on whether or not they are telling you the truth about their financial condition.

    The only other thing I can suggest is that only if your judgment has counts for fraud that were in fact included in the final judgment, then this would not necessarily be dischargeable in the bankruptcy. However, you would need to file an adversary proceding in federal bankruptcy court to get a judge to rule on the issue of dischargeability.

    This answer is provided for informational purposes only. Actual legal advice can only be provided in an office consultation by an attorney licensed in your jurisdiction, with experience in the area of law in which your concern lies.

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