creditor rights

[brooklyn101]

Chicago, Illinois

A friend borrowed money and never paid it back as she continuously promised. She then filed and included the debt in a bankruptcy. The notification to me as a creditor was sent to the wrong address. I never new about the filing. I sued her in small the state small claims court.

The lawyer reopened her discharged bankrupcy to hold me in contempt of court for trying to collect on this debt.

What rights do I have as a creditor to protect myself because I was not properly notified because now I will have to pay her and her lawyer.

[Who's Liable?]

Originally Posted by brooklyn101

Chicago, Illinois

A friend borrowed money and never paid it back as she continuously promised. She then filed and included the debt in a bankruptcy. The notification to me as a creditor was sent to the wrong address. I never new about the filing. I sued her in small the state small claims court.

The lawyer reopened her discharged bankrupcy to hold me in contempt of court for trying to collect on this debt.

What rights do I have as a creditor to protect myself because I was not properly notified because now I will have to pay her and her lawyer.

Your friend was smart in including you as a creditor. You can NEVER sue her for the monetary amount owed, you can NEVER breach the subject to her, you can NEVER hint that she owes you money. Any act will be looked upon as being an attempt to collect a discharged debt and will be faced with cotempt and fees. As you have experienced.

While a BK case must inform the creditors, doing so requires sending the notice of the applicants intention of filing BK to the last known address of the creditors. If that happens to be the place you stayed two apartments ago, that is where the notice was sent. Regardless, most states deem that ALL creditors are included in the discharge REGARDLESS of notification.

[azatty]

Key questions:

1. Did you receive notice of the bankruptcy filing (you say "no.")
2. Did you receive a notice of discharge from the bankruptcy court?
3. Did your friend's attorney ever inform you (preferably in writing) that the debt had been discharged and that you could not collect?
4. Did your friend ever tell you s/he filed bankruptcy when you asked about getting paid?

If the answers are "no, no, no, no" it's unlikely the Court will sock you for fees. You respond to the contempt motion by stating that you never received notice of the filing or the discharge, that neither the debtor nor his/her attorney contacted you about the bankruptcy, and that the contempt motion hit you from out of the blue. Sanctions are normally awarded only for willful violation of the automatic stay or willful violation of the discharge injunction. Bankruptcy judges tend to be fair minded people, and I don't know many who will stomp on an individual for a good faith mistake, provided that once you learned about the bankruptcy you took no further action.

Now, if you knew about the bankruptcy at some point and pressed the payment issue, prepare for an old-school stomping.