Do I file for bankruptcy before or after the company takes legal action against me? 37 Answers as of October 26, 2011

I was supposed to get married in January, 2012. I sent a letter, via certified mail, letting the catering hall know that I need to cancel due to financial hardship. They contacted me and told me that according to the contract, I had to cancel 6 months prior, not 3 months. If they take legal action against me (please let me know if they can), would I be able to file for bankruptcy before or after they take legal action? It's an $18,000 tab! Please let me know asap.

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The Law Office of Darren Aronow, PC
The Law Office of Darren Aronow, PC | Darren Aronow
Without reading the agreement, I cannot tell you if you are liable for damages. However, you can file bankruptcy before or after they file a legal action.
Answer Applies to: New York
Replied: 10/26/2011
Ray Fisher Law Offices
Ray Fisher Law Offices | Ray Fisher
They may be able to take legal action. It depends on the contract. It doesn't matter whether you file bankruptcy before or after they do that.
Answer Applies to: Texas
Replied: 10/26/2011
Attorney at Law
Attorney at Law | Douglas W. Harold, Jr.
You can file for bankruptcy any time you want to. However, it may be better for you to file before you get married if your spouse-to-be has any significant income, because his/her income will count against you for your eligibility for bankruptcy. However, if your spouse-to-be doesn't have any income (or makes very little money), then having two (or more) people in your household may actually help your eligibilty for bankruptcy. Also, if the catering company is starting to file a lawsuit against you, it may be in your best interest to file for bankruptcy before they get a judgment because even though the bankruptcy will wipe out your personal liability for the judgment, it will still remain on the books as an unsatisfied judgment, which may work to your disadvantage in the future.
Answer Applies to: Virginia
Replied: 10/25/2011
Alfred Law Firm
Alfred Law Firm | Janice Alfred
Yes they can take legal action against you for breach of contract. And it doesn't matter whether you file before or after they take legal action against you as long as you list them as creditors in the bankruptcy petition. However, if this debt is the only reason why you are thinking about filing bankriptcy, you should probably wait to see whether they sue you or not.
Answer Applies to: Georgia
Replied: 10/24/2011
Eranthe Law Firm
Eranthe Law Firm | Cate Eranthe
If this is the only reason, you will be filing bankruptcy I would wait to see if they take any legal action. They can sue you under the contract for losses suffered due to your breach. You may have defenses and should have a knowledgeable local lawyer look at the contract and advise you of your rights. If they do file suit you can file for bankruptcy protection and notify the court where the suit is located that all proceedings are stayed (assuming no bankruptcy filed in the past eight years).
Answer Applies to: California
Replied: 10/24/2011
    Janet A. Lawson Bankruptcy Attorney
    Janet A. Lawson Bankruptcy Attorney | Janet Lawson
    you can file for bankruptcy at any time, even after they get a judgement - unless it is a judgement for fraud (which this does not sound like).
    Answer Applies to: California
    Replied: 10/21/2011
    Ross Smith, Attorney at Law
    Ross Smith, Attorney at Law | Charles Ross Smith III
    You do notneed to wait until a creditor sues you to file bankruptcy. We list disputed debts, contingent debts and even debts that we know are never going to be sued upon, in bankruptcy petitions. It would make sense for the caterer to keep at least part of your deposit if there is one. However, it does not make much sense to sue a person who has no job and no assets. Sure, the caterer could sue you for the amount of their lost profit (not the entire enchilada). But why waste time , effort and money, if there is no payoff? If this is your only financial problem, then I would advise waiting to file untill after the caterer actually files suit. Keep a stash ready. You may want to dive into Bankruptcy Court in a hurry. Good luck.
    Answer Applies to: Ohio
    Replied: 10/21/2011
    Braunstein Law, PC
    Braunstein Law, PC | Jacob Braunstein
    You have the option of filing bankruptcy either before or after the company takes legal action (assuming of course there are no other timing considerations which would affect your ability to file a bankruptcy). You should consult with a bankruptcy attorney to determine the best course of action.
    Answer Applies to: Oregon
    Replied: 10/21/2011
    Bankruptcy Law office of Bill Rubendall
    Bankruptcy Law office of Bill Rubendall | William M. Rubendall
    You can file bankruptcy before you are sued, after you are sued, or after there is a judgment.
    Answer Applies to: California
    Replied: 10/21/2011
    Bankruptcy Law Center
    Bankruptcy Law Center | Bill Zurinskas
    It is important to talk to competent legal counsel now to determine whether to fight the lawsuit or file bankruptcy. It is generally wise to file bankruptcy before any creditor obtains judgment on a lawsuit.
    Answer Applies to: Colorado
    Replied: 10/21/2011
    Law Office of Larry Webb
    Law Office of Larry Webb | Larry Webb
    It depends on the rest of your financial circumstances. Such debt should be discharged, it doesn't matter if a lawsuit has been filed or not. It does matter if they file, get a default and record a judgment lien, so the sooner you file the better.
    Answer Applies to: California
    Replied: 10/21/2011
    Bird & VanDyke, Inc.
    Bird & VanDyke, Inc. | David VanDyke
    You can file before, during or after the legal action. However, if you are sure you need to file then do it sooner rather than later and definitely before you marry.
    Answer Applies to: California
    Replied: 10/21/2011
    Dan Wilson Bankruptcy
    Dan Wilson Bankruptcy | Dan Wilson
    You are probably contractually liable. You might try to negotiate with them before you file BK. Do you have other debt? If you are not able to settle with them and they sue, you can file a BK later.
    Answer Applies to: Colorado
    Replied: 10/21/2011
    Canty Law Firm
    Canty Law Firm | Timothy Canty
    The debt is dischargeable before or after they take legal action.
    Answer Applies to: Colorado
    Replied: 10/21/2011
    Law Office of Michael Johnson
    Law Office of Michael Johnson | Michael Johnson
    You can file before or after. It does not matter.
    Answer Applies to: Florida
    Replied: 10/21/2011
    Weig Law Firm, LLC
    Weig Law Firm, LLC | Paul H. Weig
    You can file before or after, and if the debt is dischargeable it will be discharged. They cannot take any money from you until either 1) they get a judgment, or 2) 45 days after you are served with the Summons and Complaint and do not answer it, or 3) they ask the court to allow them to do a pre-judgment garnishment. So, if you Answer the lawsuit, you will have at least 28 days notice before judgment is entered, because that is how much notice you get on a Motion for Summary Judgment. With that said, are you sure bankruptcy is necessary? If there is a lot of other debt it may be, but if this is the only thing, you may have defenses and a good lawyer may be able to negotiate this down to a much more reasonable sum at reasonable terms. It may be cost effective to hire a lawyer if you can save $9,000 by spending $1500 or so.
    Answer Applies to: Minnesota
    Replied: 10/21/2011
    Charles R. Nettles - Attorney at Law
    Charles R. Nettles - Attorney at Law | Charles R. Nettles
    It sounds like they could take legal action. Whether they do or not, is the big question. A bankruptcy can deal with the situation whether they have begun legal action, completed the action or have not even commenced it.
    Answer Applies to: Texas
    Replied: 10/21/2011
    Benson Law Firm
    Benson Law Firm | David Benson
    Sorry to hear about your financial difficulties and their effect on your marital plans. Filing bankruptcy either before or after a lawsuit is filed should be fine, but it would be advisable to file before taking a judgment.
    Answer Applies to: Ohio
    Replied: 10/21/2011
    Law Office of Lynnmarie A. Johnson
    Law Office of Lynnmarie A. Johnson | Lynnmarie Johnson
    You can file now. It is a debt you owe and legally are responsible for.
    Answer Applies to: Michigan
    Replied: 10/21/2011
    Jakob-Barnes Law Firm, LLC
    Jakob-Barnes Law Firm, LLC | Jennifer Jakob-Barnes
    Whether they can take legal action against you depends on the terms of the contract. You can file for bankruptcy either before or after they take the legal action. If they start a lawsuit against you, a bankruptcy filing will stop the lawsuit.
    Answer Applies to: Georgia
    Replied: 10/21/2011
    Rosenberg & Press
    Rosenberg & Press | Max L. Rosenberg
    Either way will be fine. Just make sure you list the claim on your schedule.
    Answer Applies to: Connecticut
    Replied: 10/21/2011
    Law Office of Todd M. Gers, PLC
    Law Office of Todd M. Gers, PLC | Todd Gers
    You can file bankruptcy either before or after a creditor takes legal action.
    Answer Applies to: Michigan
    Replied: 10/21/2011
    Gregory J. Wald, Attorney at Law
    Gregory J. Wald, Attorney at Law | Gregory J. Wald
    I don't know if there are any special laws that govern this, but if you are just talking about the rental of the premises, the general rule would be that they can only sue you if they can't find someone else to rent the hall that day for the same price. If they rented it to someone for a lower price, they could sue you for the difference. You could file bankruptcy before or after they sued you. If this is the only debt problem that you have, it would probably make sense to wait until they sue you. Otherwise, you might have filed bankruptcy for nothing.
    Answer Applies to: Minnesota
    Replied: 10/21/2011
    Marc S. Stern
    Marc S. Stern | Marc S. Stern
    Yes they can file a law suit against you. Whether they will be successful is another question. The creditor has an obligation to mitigate damages. That means that they need to look for another function to cater. If you can find a replacement, that ought to solve the problem. As for filing, it does not make any difference as far as dischargeability of the debt goes. From the point of when to file, it makes more sense to file before judgment because having a judgment creates other issues. Also, will your potential spouse be included? That also makes a difference.
    Answer Applies to: Washington
    Replied: 10/21/2011
    Kenneth A. Parker, P.C.
    Kenneth A. Parker, P.C. | Ken Parker
    It depends. Assuming you have other creditors, then it might make sense to go ahead and file bankruptcy before they sue you just so you will have the peace of mind of knowing this is being handled. However, it you really don't have any other creditors, it might make sense to wait a little while before filing. The Contract would normally determine if the catering company can sue you. If they do sue you, you can then file a bankruptcy and that Bankruptcy and a Bankruptcy Attorney can file a Stay of Bankruptcy that will put the law suit on hold pending the outcome of your bankruptcy.
    Answer Applies to: Georgia
    Replied: 10/20/2011
    Law Offices of Joseph A. Mannis
    Law Offices of Joseph A. Mannis | Todd Mannis
    Before or after, whichever you choose! If you know they're going to do it, you can do a preemptive strike, so to speak, which would especially make sense if you have other debts and were considering bankruptcy anyway. You can hang tough to see if they really carry on with a lawsuit.
    Answer Applies to: California
    Replied: 10/20/2011
    Ursula G. Barrios Law
    Ursula G. Barrios Law | Guillermo Machado
    Preventive is always better.
    Answer Applies to: California
    Replied: 10/20/2011
    Grace Law Offices of John F Geraghty Jr.
    Grace Law Offices of John F Geraghty Jr. | John F. Geraghty, Jr.
    First have an Attorney take a look at the contract.
    Answer Applies to: Georgia
    Replied: 10/20/2011
    Ashman Law Office
    Ashman Law Office | Glen Edward Ashman
    If the contract says they can sue you, they can. Waiting until after a suit is filed is dangerous, as they can win 45 days after filing. So see a lawyer soon to evaluate your options.
    Answer Applies to: Georgia
    Replied: 10/20/2011
    The Orantes Law Firm
    The Orantes Law Firm | Giovanni Orantes
    You can file either before or after. If you do not need to file right now, you may as well wait until after they start bothering you. If you wait until after they start legal action, you should file before they obtain a judgment as your bankruptcy proceedings will get more expensive if the judgment has to be removed from the title of any property you own. With that said, there may be other factors that would advise a filing now such as if you qualify for Chapter 7 now but will no longer qualify later, etc. You should consult a reputable bankruptcy attorney to make the appropriate determination.
    Answer Applies to: California
    Replied: 10/20/2011
    Foster Law Group
    Foster Law Group | William Foster
    You can file bankruptcy before or after they take legal action against you. If you are planning on filing bankruptcy, it is better to take care of it right away so you can start rebuilding your credit sooner. You may also want to review the contract you signed with them, or ask them for a copy if you did not retain one. Further, a six month cancellation policy may not be enforceable. You should legal counsel from an attorney.
    Answer Applies to: Colorado
    Replied: 10/20/2011
    Robert J. Doig, Attorney at Law
    Robert J. Doig, Attorney at Law | Robert Doig
    First: They can take legal action against you for breaching the contract. You might want to review exactly what the contract says regarding the circumstances you describe. The catering hall may be entitled to liquidated damages for your failure to perform your end of the bargain. Second: You can file for bankruptcy either before or after they sue you. It would probably be a good idea to get your case filed ASAP. If the catering hall alleges that your cancellation was based upon fraud and they get a judgment against you based upon that allegation, the debt may not be dischargeable in your bankruptcy case. By getting your bankruptcy filed before they sue you, you will prevent them from getting that judgment against you.
    Answer Applies to: Colorado
    Replied: 10/20/2011
    Heupel Law
    Heupel Law | Kevin Heupel
    You can file bankruptcy before or after the caterer takes legal action. If this is your only debt, then I would recommend you wait and see what the caterer decides to do.
    Answer Applies to: Colorado
    Replied: 10/20/2011
    Colorado Legal Solutions
    Colorado Legal Solutions | Stephen Harkess
    You can file bankruptcy at any point and keep things from going further, even after judgment has been entered against you. Whether you owe the money will depend on whether the contract does require more notice to cancel and whether the caterer is able to mitigate their damages by cancelling orders or booking other work. To the extent the caterer can avoid damage which they are obligated to try to do, they cannot charge you.
    Answer Applies to: Colorado
    Replied: 10/20/2011
    The Schreiber Law Firm
    The Schreiber Law Firm | Jeffrey D. Schreiber
    Yes, they can and you can file at any time.
    Answer Applies to: California
    Replied: 10/20/2011
    Eliza Ghanooni, Attorney at Law
    Eliza Ghanooni, Attorney at Law | Eliza Ghanooni
    Its best to file before they sue you (although you can also file afterwards)and it sounds like they can sue you because you seem to be in breach of contract.
    Answer Applies to: California
    Replied: 10/20/2011
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