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About Norma Duenas - California Bankruptcy Attorney
Expertise
Norma Duenas is a California Bankruptcy Attorney representing clients in Chapter 7 and Chapter 13 consumer bankruptcy cases. Norma Duenas is the founding member of Southern California Law Advocates a consumer bankruptcy law firm. For further information you can visit us at: California Bankruptcy Attorney - Riverside, Los Angeles, & Orange County

Experience
Have filed over 350 consumer bankruptcy cases in Orange County, Los Angeles and Riverside. I have worked previously for Macey and Aleman, the largest consumer bankruptcy firm in the country. Currently I am the owner of Southern California Law Advocates, a bankruptcy law firm with offices in Orange County, Los Angeles and Riverside. Law offices is focused on consumer Chapter 13 and Chapter 7 bankruptcy.

Organizations
California Bar Association American Bar Association Riverside Bankruptcy Attorney

Education/Credentials
University of California, Irvine, BA in Criminology, Law and Society California State University, Los Angeles MS in Criminal Justice University of San Diego, Law School, JD Cum Laude

You are here: Experts > Business > Corporate Law > Bankruptcy Law > Lender's Rights?

Bankruptcy Law - Lender's Rights?

Expert: Norma Duenas - California Bankruptcy Attorney - 10/15/2009

Question
Some months back, I'd made the horrible error of loaning to a person, whom I thought was my friend, the amount of $8K. Luckily I did have him sign a contract promising that he "must" pay me back by a certain deadline. This date has since come and gone, and I have not even received a penny back from him. (There was even a line in the contract stating that his debt will be okay with me, if he can't pay the full amount, if he'd at least pay me $1K before the deadline.) I'd even snail-mailed to him a letter, matter-of-factly stating that his deadline has passed, and could he please fix this situation before it escalates.

Since I've received nothing back, and my calls pleading for him to help me have gone ignored, I then went and acquired the services of a collections agency. They have tracked him down and reported that he gave a nasty reply back, threatening that he will just slip out of this by declaring bankruptcy. Apparently successfully doing so will relieve him of the collections people I hired and also his debt to me. (I only hired the agency after he ignored my requests to pay me back even some of my loan, any amount; interest is not even a question, as I'm not expecting to make any profit out of this whole sorry ordeal at all. I'd just be happy to get just my money back.)

I will admit I don't know much about bankruptcy law, having never gone broke, but what I'm learning makes me uneasy. Does he actually face any harsh consequences himself if he does try to file for bankruptcy? Or is it really that easy to back out of a deal between friends? Does my loaning money to someone immediately make me a sucker? Is there any other recourse I have available in order to recover what I've lost?

I appreciate any help you can give. Thanks.

Answer
In Chapter 7 bankruptcy individuals can discharge unsecured personal loans which from your description, this loan appears to be. There are items that are nondischargeable in bankruptcy one of them being fraudulent loans and charges. There are numerous factors the courts use to determine whether the debt was fraudulent. Even if he files for bankruptcy you may be able to prevent him from getting this debt discharged if you can establish that the loan was fraudulent. You will have to file an objection in the bankruptcy in order for the court to review if this debt is nondischargeable. If the person obtained this loan through fraud or misrepresentation you may want to consider filing an objection in the bankruptcy if he files for bankruptcy.

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