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Bankruptcy Law/Bankruptcy - Civil Judgment for punitive damages

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Expert: - 6/12/2008


Question
I may be included in a law suit with my employer by an employee claiming hostile work environment and sexual harassment when she was not promoted. I am the supervisor. If she is successful in her claim and I am included in punitive damages will I be able to file bankruptcy to discharge the judgement rather than lose what few assets I have?

Answer
I am sorry that you are facing this. Unfortunately litigation like this has become all too common. I hope you come out of it allright. In most lawsuits like this, if the plaintiff is successful, the damages will be paid by the employer, who has the "deep pockets." Also, you should find out if your employer has insurance coverage for this kind of claim.

Bankruptcy will generally not protect you from a judgment that includes punitive damages. However, there is a chance that you can get around that if you are able to file a Chapter 13 bankruptcy before any judgment is made against you. There might still be a very narrow exception left in the new bankruptcy law that might protect you. You should seek advice from the best Chapter 13 attorneys in your district. Ask them to refer to Bankruptcy Code Section 1328(a)(4). If they are puzzled by that, ask your lawyer to call me and I will be happy to explain what I mean.

You should also obtain advice and possibly representation from a litigation attorney with expertise in defending such lawsuits. The cost of a consultation will be trivial compared to worrying yourself to death over this and what else you may stand to lose.  

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Los Angeles Bankruptcy Lawyer Leon D. Bayer

Expertise

Leon Bayer has successfully represented clients in bankruptcy for over 30 years. He is frequently called upon by the media, the California Bar and other associations to provide insight and help educate attorneys on bankruptcy issues. If you or other readers want to keep up with my blog postings about life in and out of bankruptcy, you can follow my blog at http://www.bankruptcyblogger.org/ and my personal web site at http://www.debt-relief-bankruptcy.com and A Human Guide to Bankruptcy at http://www.thebankruptcyguide.net/ Leon also writes about bankruptcy law for Nolo, see http://www.nolo.com/law-authors/leon-bayer.html and his "Ask Leon" bankruptcy law blog column at http://blog.nolo.com/bankruptcy/

Experience

Leon is a Certified Specialist in Bankruptcy Law by the State Bar of California, and has been a practicing bankruptcy lawyer in Los Angeles, California for 33 years.

Organizations
National Association of Consumer Bankruptcy Lawyers, California Bar Association, Los Angeles County Bar Association.

Publications
Author, ?The Essentials Of Chapter 13,? Daily Journal Report, December 18, 1987.
Contributing Editor, Basic Bankruptcy, California Practice Handbook, Matthew Bender 1992, 1993.
CEB Consultant, CEB-Personal and Small Business Bankruptcy Practice in California, 2003.


Education/Credentials
B.A., J.D.

Awards and Honors
President, 1995-1996-Los Angeles Bankruptcy Forum; Member - Los Angeles County Bar Association Committee on Commercial Law & Bankruptcy, 1988. Law Advisory
Commission-Personal & Small Business Bankruptcy Law of the State Bar of California, 1996-2000

MR. BAYER SAYS: The big banks and credit card companys have been working overtime for many years to undermine the Consitutional right of the American people to be able to claim bankruptcy protection. In 2005 the banking lobby successfully convinced Congress and the President to make the laws and proceedures more complicated, hopeing that it will stymie legitimate people from filing bankruptcy. They succeeded in gaining these complex new legal proceedures by greasing the legislative system with hundreds of millions of dollars in "campaign contributions." The good news for the American people is that while the new laws have made the proceedures needlessly complex to the point where inexperienced people can't help but trip over the maze of new rules and regulations, the process is still doable, especially with a lawyer who is well trained and experienced in this specialty.

Past/Present Clients
I have probably handled something on the order of about 15,000 bankruptcy cases thropughout my career.

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