What will happen to the judgment if bankruptcy is filed? 16 Answers as of February 05, 2011

I lost a lawsuit in the amount of $75,000 and the awardee filed chapter 7 and listed the lawsuit as an asset. What happens to the lawsuit?

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Law Offices of Michael J. Berger
Law Offices of Michael J. Berger | Michael J. Berger
The judgment against you is still valid. It is now part of your creditor's bankruptcy estate. The Trustee in the bankruptcy case could take collection action against you, or sell the debt to a third party.
Answer Applies to: California
Replied: 2/5/2011
Bankruptcy Law Center
Bankruptcy Law Center | Bill Zurinskas
It becomes property of the bankruptcy estate of the awardee's bankruptcy. The trustee steps into the shoes of the awardee and can collect the $75,000 judgment.
Answer Applies to: Colorado
Replied: 2/1/2011
Gus Johnson Attorney at Law
Gus Johnson Attorney at Law | Gus Johnson
The Chapter 7 trustee can pursue collection.
Answer Applies to: South Dakota
Replied: 2/1/2011
Law Office of Larry Webb
Law Office of Larry Webb | Larry Webb
The judgment is an asset the Bankruptcy Trustee should try to collect on. The trustee could also sell the judgment. Consult with an Attorney.
Answer Applies to: California
Replied: 1/31/2011
Mankus & Marchan, LTD
Mankus & Marchan, LTD | Tony Mankus
The Trustee in the Chapter 7 bankruptcy can pursue collection of the judgment against you. If he chooses not to do so, the judgment reverts back to your creditor after the bankruptcy case is discharged.
Answer Applies to: Illinois
Replied: 1/31/2011
    William C. Gosnell, Attorney at Law
    William C. Gosnell, Attorney at Law | William C. Gosnell
    The chapter 7 trustee takes over the lawsuit and tries to collect from you. You should file a chapter 7 also.
    Answer Applies to: Tennessee
    Replied: 1/29/2011
    DiManna Law Office, LLC.
    DiManna Law Office, LLC. | Dawn DiManna
    It will depend on whether the Trustee wants to pursue it, which probably will happen.
    Answer Applies to: New Hampshire
    Replied: 1/28/2011
    The Law Office of Mark J. Markus
    The Law Office of Mark J. Markus | Mark Markus
    The lawsuit is presumably completed if there is already a judgment, so nothing happens to the lawsuit. The debt you owe to the party who filed bankruptcy is an asset of his bankruptcy estate so the Trustee of the bankruptcy has the choice of either taking over collections of the debt from you, or allowing the party who filed the bankruptcy to continue doing so and paying the Trustee whatever is recovered above any exempt amount.
    Answer Applies to: California
    Replied: 1/28/2011
    Carballo Law Offices
    Carballo Law Offices | Tony E. Carballo
    Interesting word "awardee".... but good description of the person awarded the judgment against you who is usually called the judgment creditor. That person is supposed to list that judgment as an asset in his/her bankruptcy Schedule B and may be able to exempt (protect for himself) some of it but probably not most of it since the exemption about is limited. Therefore, the judgment is now collectable by the Trustee for the benefit of the awardee's (your judgment creditor's) own creditors in his bankruptcy case. The Trustee might decide that it is uncollectable and abandon it or go after you to collect it.

    People filing bankruptcy sometimes "forget" to report assets like judgments in their bankruptcy schedules so you might want to check to see if that person (awardee) reported it in the bankruptcy case. You might have a defense to any collection from that person if he failed to report it in the bankruptcy case because technically the failure to report the judgment and exempt at least part of it means that person has no power to enforce it. Only the trustee has that power to collect the judgment unless the trustee abandons it to the awardee if the trustee does not feel he can get paid.
    Answer Applies to: California
    Replied: 1/28/2011
    Ursula G. Barrios Law
    Ursula G. Barrios Law | Guillermo Machado
    If you are on the losing end of the judgment and the plaintiff filed a BK, then the plaintiff should have filed the lawsuit as an asset (similar to accounts receivable). Depending on your state's exemptions, the plaintiff/debtor would be able to protect up to a certain amount of the lawsuit and still recover that from you. Whatever is not protected would be paid out to other creditors. You are still obligated to pay on that judgment (if you lost). You can file for BK to discharge the judgment.
    Answer Applies to: California
    Replied: 1/28/2011
    Steven D. Keist, Attorney at Law
    Steven D. Keist, Attorney at Law | Steven D. Keist
    The Chapter 7 Trustee may hire an attorney to review the matter to see if the Judgment is collectible. Someone From the Trustee's office may contact you in that regard.
    Answer Applies to: Arizona
    Replied: 1/28/2011
    Uriarte & Wood, Attorneys at Law
    Uriarte & Wood, Attorneys at Law | Robert G. Uriarte
    The judgment is an asset of the bankrupt's estate and the trustee will most likey seek to recover the judgment for the benefit of the debtor's creditors.
    Answer Applies to: California
    Replied: 1/28/2011
    Greifendorff Law Offices, PC
    Greifendorff Law Offices, PC | Christine Wilton
    It depends on what the judgment was for.
    Answer Applies to: California
    Replied: 1/28/2011
    The Orantes Law Firm
    The Orantes Law Firm | Giovanni Orantes
    The judgment becomes an asset of the bankruptcy estate at that time, which the Chapter 7 trustee may decide to try to collect from you or sell to a third party, including you. That means that you could try to purchase it from the Trustee ideally for less than the full amount awarded. If the Chapter 7 Trustee does not administer the judgment, it reverts back to the Debtor, who can then collect from you.
    Answer Applies to: California
    Replied: 1/28/2011
    Janet A. Lawson Bankruptcy Attorney
    Janet A. Lawson Bankruptcy Attorney | Janet Lawson
    The value of the judgement passed to the Trustee. The trustee in bankruptcy may try to collect it or... the trustee could abandon it back to the debtor.
    Answer Applies to: California
    Replied: 1/28/2011
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