My major creditor- ex.partner- got a judgement against me for breach of contract and corporate violation. Based on the judgement, I had to give his money back, plus 10% interest till I'm done paying.
I filed a BK chapter 13 before the debtor's exam, to avoid the 10%. I also filed plan for 90% repayment plan. Did I get rid of the interest, or could they make me pay interest?
If the Ch. 13 Plan is approved then once it is fully performed and paid, you will receive a discharge.
That's how it typically works. If he alleges that there was a wilful or malicious injury or there was some issue with respect to fraud or breach of fiduciary duty, he may attempt to object to your Ch. 13 discharge as to the remainder of the debt. It would depend on which form of Ch. 13 discharge you try to obtain. If its a standard Plan discharge, likely you would defeat the objection to discharge; if its a hardship discharge, you might not be able to beat his objection.
A bankruptcy lawyer would have to review the underlying judgment to give you thorough advice and a game plan. Click on "Find a Lawyer" above and locate a bankruptcy lawyer in your area who handles Ch. 13 cases.
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Assuming your ex-partner files a claim in the Chapter 13 for the judgment amount plus 10% interest, you can object to the claim, and make your arguments at that time as to why the interest is not valid. Generally in a Chapter 13, unsecured debts are not paid interest. You will need a fairly sophisticated legal argument to prevail. Most lawyers will charge supplemental attorney fees to file and litigate a claim objection, which could cost $500-$2500 or more depending on the complexity. Prior to objecting to the claim, do a cost benefit analysis to make sure it makes sense to file the claim objection.
This post is for informational purposes only and is not specific legal advice for your matter. Please seek advice of an attorney for guidance in your specific legal matter. I am a lawyer and debt relief agency helping persons file bankruptcy under the U.S. Code.
Unless the creditor succeeds in litigating an adversary proceeding against you, this unsecured creditor will not receive interest in a Chapter 13 case. Secured creditors draw interest on the top end at 6 or 7% per annum. If you do not have a bankruptcy attorney, you should hire one ASAP. Chapter 13 cases are not DIY projects. Experienced attorneys know how to file objections to creditor claims, and get claims chopped down or eliminated in Chapter 13 cases. This judgment may be one of those claims that could require an objection. Go consult an attorney about your case. If you fail to get a plan confirmed through the court and paid out, your filing will be in vain.
I am somewhat disagreing with my breatheren.
Interest is calculated on the judgment through the petition date. It stops then.
But, if you are solvent and it is 100% case, they can will be an argument that post petition interest is also due. The cases disagree as to the appropriate rate calculation ofThe interest.
Of course you should have a lawyer representing you
He will be treated as any other creditor in the plan. If your plan calls for a 90% dividend, then the will get 90% of then balance of the claim at the time the case is file, provided they file a claim in your plan. You should,have an attorney to get you thought this process.
These are questions for your own BK lawyer. If you don't have one, your case will very likely be dismissed. Non-attorney 13's have almost 100% failure rate.
You are not my client and I am not your attorney. This advice is given in the spirit of the AVVO platform and is based on general legal principles. You become a client when you enter into a formal retainer agreement with me.
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