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Does the bankruptcy trustee's settlement of claims extend to me?

Gig Harbor, WA |

I went through a bankruptcy. The bankruptcy trustee entered into a settlement agreement with someone I loaned money to prior to filing. The settlement agreement says that it was a waiver and release of all matters in dispute between the Trustee on behalf of my estate and the party I loaned money to. Does this release me of all claims that the other party had against me before the settlement agreement was signed?

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Attorney answers 4


I am not sure what claims that other party would have had against you since you were the one that loaned the money to them. If the other party had claims against you prior to your filing of the bankruptcy and they did not seek a determination of the whether or not that claim was dischargeable, your bankruptcy discharge should release you from any claims that the party may have had against you.

My answer is general information not intended to create an attorney-client relationship. Seek advice from a qualified attorney to see how the law fits your specific facts. If you are in Washington, please feel free to contact us at (425) 283-0432 to see if we might be of assistance.


If the amount you loaned is an asset of your bankruptcy estate, which it would be, then how could the other party have a claim against you as their creditor? Please provide more information as it sounds like the other party had a counter-claim, but if the trustee settled the matter, you may be off the hook. You should ask your bankruptcy attorney about this, and if you don't have counsel, then speak to the trustee.



They had separate claims that I wasn't aware so they were not named as a creditor. I guess the question is, if the trustee got them to sign a general release of all claims, do I get the benefit of it?


It would appear that you are out of it. The money recovered will go to the BK estate to pay claim and administrative costs. As to possible claims against you the discharge of the BK should eliminate any possible debt you might have/


You have to review the Trustee's motion and order. They will tell you what was settled, i.e., just part or all of your claim. I'd check with your attorney.

Please remember to mark my answer as "helpful" or even the "best" if that is the case. My response is general information not intended as legal advice or to create an attorney-client relationship. Seek advice from a qualified attorney to see how the law fits your specific facts. I am licensed to practice law in Washington and Oregon. www.