Originally posted by Halket
Looks old "JasonRT" still can't get it right....
Question asked, "If I file bankruptcy before the 20 days is up, then does the judgement never occur and it only goes back to the original debt that I owe and not all of the extra fees? If they get the judgement and then I file bankruptcy, do the fees go into the plan?"
JasonRT response: "If you file a Chapter 13 bankruptcy you will be required to pay all of the court costs and attorney fees. If you file a Chapter 7 bankrutpcy and this debt is UNSECURED the entire amount will be discharged and you will pay nothing."
Truth: Just the fact of filing a bankruptcy petition freezes ALL creditor actions, including a lawsuit in progress (since the federal bankruptcy action supercedes any local or state legal proceeding). And this 'freeze' stays in place until either the bankrutpcy court rules, or the creditor is able to win a motion to exclude their debt from the proceeding (unusual). Lets assume that no exclusion is ordered. Your debt can now go either of two ways:
(1) Your bankruptcy petition is denied and debts are NOT discharged. In this case, the creditor moves forward (to court or in court), or
(2) Your bankruptcy petition is granted. Depending on your filing (7 or 13), this gets two different results. Chapter 7 (liquidation): Your non-exempt assets are turned over to the court and sold, the proceeds pay the creditors, all debts are discharged, you start "new". Or, chapter 13 (reorganization): Your non-exempt assets are turned over to the court, your ability to future payments (usually over 3 years) is determined and the creditors are paid back (partially) by dividing your total pool (assets sold plus payments) is divided into the total debt and creditors are paid a percentage of debt. Debts are discharged upon your completing the payment plan.
The 'debt value' of this specific debt is what it was at the time of the 'freeze'. If no judgment rendered, you only owe the debt. If a judgment was rendered that included costs and fees, you owe all of them. The 'debt value' has nothing to do with the bankruptcy chapter you file under as alleged by JasonRT.