A person owes us money and knows it, and just called to say he would have to file bankruptcy if we proceed with our small claims case. Now mind you, this person has way more assets than us. He owes us roughly 9000.00
The defendant could file for bankruptcy if you get a judgment against him or her. However, if the case involves fraud or certain other intentional torts, it may not be dischargeable in bankruptcy. Also, if the defendant has assets, some of those assets are subject to distribution to creditors, which you would be.
Don't let the threat of bankruptcy deter you; all debtors say that. Professional collectors hear that every day, and they proceed with a lawsuit, some debtors do end up filing bankruptcy, some don't. Assuming you have a valid claim and if this person is refusing to pay, speak to an attorney or sue.
However, to your question, odds are, if the person files bankruptcy, that would extinguish your claim and you won't see any money. However, to know whether that would be the case for your specific situation would require a deeper review your situation.
When a person who owes you money threatens bankruptcy, you ask, "oh, okay, which bankruptcy attorney have you hired?" then sit back and enjoy the hemming and hawing :)
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