Expert: Mark J. Markus- California Bankruptcy Attorney - 11/30/2008

Question
QUESTION: This takes place in the State of California. A friend I loaned $7500.00 to is filing for bankruptcy (Ch. 7 I imagine). He states he DID NOT include me as one of the creditors. He promises to then dedicate himself to paying me off after the bankruptcy is finalized.

Can I sue him if he does not keep his promise? I know there is a 3-year (or so) time limit before which I must sue.

Thank you for your time.

ANSWER: No.  The only way you would be legally able to sue him after is if you enter into a valid reaffirmation agreement and file it with the court (and it either needs to be signed by his attorney or approved by the judge in the case, after a hearing).

Moreover, his failure to list you as a creditor could be grounds for sanctions and penalties against him--although that doesn't really affect you any.



---------- FOLLOW-UP ----------

QUESTION: Thank you for your reply, sir.

So this Valid Reaffirmation thing. Essentially, I would not be aware of the appropriate time to go to court and face his lawyer and the judge on this matter because since he has not listed me as a creditor, I wouldn't get that vital piece of info in the mail, right. So I should ask him kindly (my friend, not his lawyer) to reveal this info so that I can go and try for this Valid Reaffirmation?

Answer
The option to reaffirm the debt is up to him, not you.  There's no information to reveal.  If he wants to reaffirm the debt, then someone needs to prepare a reaffirmation agreement and comply with the requirements of 11 USC 524 and the local bankruptcy rules for signing and filing the agreement.  In order to be valid, it must be signed and filed with the court before the discharge of debts is entered (which is approximately 3 months after the case is filed).