If Mom Files, Should Dad Too?

[annie509]

What is the name of your state?CA
HI. My mom was recently in a car accident and has racked up enormus medical bills to which she cannot pay ($96,000) She has no assets except for shes a co-owner of a vehicle w/ my dad. she doesnt work. as i read, i believe she has no non-exempt assets.

We're considering to file chapter 7 for her after all the medical expenses are accrued. She also has some credit card debt that she's been paying slowly but timely for some time as well.

In case the other parties involved in the accident file a lawsuit against her, (and possibliy my dad), should my dad who owns a company file chapter 7 as well as my mom?
We don't know if they will file lawsuit against us yet, but if we wait until we find out, will it be too late for mom and dad to file chapter 7 so that my dad's company can be protected against??

Thanks so much!!!

 

[bigun]

Your parents need to consult a lawyer.
You're in a comunity property state plus, an asset like a business means the range of possible answers is beyond the scope of an internet message board.

 

[chris7]

If you pre-emptively file (before the other party files suit, if they do) then any judgement they got would not be discharged. You would have to re-open the case and have it added. It would seem better to delay until you know whether they will sue or not. Definitely talk to a lawyer about the affects of a lawsuit/bankruptcy on your dad's business.

 

[AttorneyOney]

If you pre-emptively file (before the other party files suit, if they do) then any judgement they got would not be discharged. You would have to re-open the case and have it added.

That is not true. A bankruptcy discharges any debt arising from a cause of action that accrues before the case is filed. However, the parties should very definitely consult a bankruptcy attorney at some point to understand their options and to do whatever planning is permissible within the boundaries of the law. And "parties" means both Mom and Dad because CA is a community property state.

 

[chris7]

So, on the appropriate place in the paperwork they could just put... auto accident on whatever date, resulted in injuries, anticipate possible lawsuit? It seems counter-intuitive that you could have a debt discharged that has not arisen yet. I'm not quibling, I'm sure you know what your talking about, I just want to make sure I understand.

 

[Who's Liable?]

So, on the appropriate place in the paperwork they could just put... auto accident on whatever date, resulted in injuries, anticipate possible lawsuit? It seems counter-intuitive that you could have a debt discharged that has not arisen yet. I'm not quibling, I'm sure you know what your talking about, I just want to make sure I understand.

And that is what a BK lawyer is for...

 

[Ladynred]

seems counter-intuitive that you could have a debt discharged that has not arisen yet

Not really. The BK petition has several ways to classify a debt - even one you're not sure will ever BE a debt - its called 'contingency' and 'unliquidated'. The 'possible' debt from a currently non-existent judgment could be listed in such a way - just as long as the CREDITOR IS listed on the petition.