I filed a small claims case against a debtor, and 3 weeks later he filed for bankrupt

[BlueSorceress]

What is the name of your state (only U.S. law)? Wisconsin

Sorry this is so long!

I am the creditor in this case. In 2012 I loaned $600 to a "friend" who needed help paying his bills. We signed a promissory note at that time, stating that the note was to be paid in full (either in a lump sum or payments over time) by June of 2013. No money was received at all. I did not immediately concern myself with the collection of the note, as I knew he was not that well off financially at that time. During 2014, I noticed on his social media accounts that he had acquired a new car, a new motorcycle, has gone on many vacations, road trips and concerts, so I assumed he would be in a position to finally pay his debt. In the fall of 2014 I sent him a collection notice, to which I got absolutely no reply in any form. I proceeded to file a small claims case, to which he did not show up, so the judgement was entered in my favor. The court gave him 15 days in which to file a financial disclosure to me. He did not. Yesterday, after 27 days had gone by with no reply, I went to the small claims and filed a motion and order for contempt against him for not filing the financial disclosure. I was told to have the debtor served with the paperwork and a court date was set for November 2014. Upon arriving home after filing this motion I received in my mailbox, a notice from the US Bankruptcy court that he is filing Chapter 7. Here are my questions: Do I have to contact the court and tell them to cancel the hearing? Do I have to refrain from serving him with the contempt motion? (In spite of the bankruptcy, he did NOT follow the courts orders to supply me with the financial disclosure within the 15 days...I feel he is still in contempt.) Would I be able to ask the court NOT to discharge the debt because a payment plan was originally agreed to, and would still be accepted? The amount of the judgement was for $754.50. I am very poor and cannot afford a lawyer, and I'm not sure how I would be able to afford the gas to travel the 2-1/2 hours to the Bankruptcy court to argue my case.

 

[TigerD]

The amount of the judgement was for $754.50. I am very poor and cannot afford a lawyer, and I'm not sure how I would be able to afford the gas to travel the 2-1/2 hours to the Bankruptcy court to argue my case.

Cancel the hearing.
Keep an eye on PACER to ensure his case is discharged and not dismissed.
Forget about the money if the case is discharged.

DC

 

[single317dad]

If this guy owes other people money and doesn't have any assets, consider yourself lucky he never paid you anything; at least the trustee can't make you pay anything back.

 

[latigo]

What is the name of your state (only U.S. law)? Wisconsin

Sorry this is so long!

I am the creditor in this case. In 2012 I loaned $600 to a "friend" who needed help paying his bills. We signed a promissory note at that time, stating that the note was to be paid in full (either in a lump sum or payments over time) by June of 2013. No money was received at all. I did not immediately concern myself with the collection of the note, as I knew he was not that well off financially at that time. During 2014, I noticed on his social media accounts that he had acquired a new car, a new motorcycle, has gone on many vacations, road trips and concerts, so I assumed he would be in a position to finally pay his debt. In the fall of 2014 I sent him a collection notice, to which I got absolutely no reply in any form. I proceeded to file a small claims case, to which he did not show up, so thejudgement was entered in my favor. The court gave him 15 days in which to file a financial disclosure to me. He did not. Yesterday, after 27 days had gone by with no reply, I went to the small claims and filed a motion and order for contempt against him for not filing the financial disclosure. I was told to have the debtor served with the paperwork and a court date was set for November 2014. Upon arriving home after filing this motion I received in my mailbox, a notice from the US Bankruptcy court that he is filing Chapter 7. Here are my questions: Do I have to contact the court and tell them to cancel the hearing? Do I have to refrain from serving him with the contempt motion? (In spite of the bankruptcy, he did NOT follow the courts orders to supply me with the financial disclosure within the 15 days...I feel he is still in contempt.)

Would I be able to ask the court NOT to discharge the debt because a payment plan was originally agreed to, and would still be accepted? The amount of the judgment was for $754.50.

I am very poor and cannot afford a lawyer, and I'm not sure how I would be able to afford the gas to travel the 2-1/2 hours to the Bankruptcy court to argue my case.

Other than notifying the clerk of the court in the civil case that all pending proceedings there are to be held in abeyance as per the defendant's bankruptcy filing, the only thing you CAN and should do at this juncture is to timely file you unsecured creditor's claim with the bankruptcy clerk - copy of the judgment attached.

With regard to arguing your "case", I think what you are thinking is that if you could afford to travel the 2-1/2 hours to attend the first meeting of creditors, you would be entitled to argue that because a deferred "payment plan was originally agreed to" * your money judgment is not dischargeable in the debtor's bankruptcy proceeding.

The trouble there begins with the fact that the first meeting of creditors (the one announced in your notice from the bankruptcy clerk) is not the proper place to present such an argument.

To resolve the question you would first need to file with the bankruptcy court what is known as an adversary proceeding requesting that the bankruptcy court determine the dischargeability of your judgment. See 11 U.S.C. Section 523(a)(2).

But it would be pointless for you to pursue the lengthy adversary process for the simple reason that the debt underlying your judgment (the mentioned promissory note) is not one that falls within any of the several categories of claims that are by law nondischargeable in bankruptcy.
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[*] Note that a promise to pay on top of a promise to pay does not enhance a creditor's claim under the laws of bankruptcy.