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Bankruptcy Law/My question to you 6/12


In reference to my question to you of 6/12 - I misspoke.  I apologize.  The Bank was not granted a judgment, rather a hearing to appoint an attorney because he cannot afford one.  I spoke with a Bank rep and was told this:  The Bank can receive distributions from the Bkrptcy Ct and pursue him individually also because the loan was in his Business' name and the Business is an S Corp - which cannot file Bkrptcy; however the Bank attorneys will seek a judgment against the Business after the Bkrptcy term is up. To further cloud the issue, the Bank rep says the Bank would like to set up payments after the Bkrptcy term is up to collect the remaining balance. Bank rep said they could pursue him both ways.  Is this true?

Not quite true.  The bank is prevented from pursuing your husband so long as the 13 is in effect;  if the plan has not yet been confirmed, it should be confirmed with "property NOT TO REVEST IN THE DEBTOR UNTIL DISCHARGE" to keep the stay going as to his income.

Now, once the 13 discharge is entered down the road, your husband's guarantee of the corporate debt will be discharged;  it does NOT make the debt go away as to the corportion, that's true;  but it DOES get your husband off the hook.  I still recommend getting local legal advice on this;  the bank is clearly not on your side and is stretching the truth to the breaking point.

I'm assuming he did guarantee the corp. debt as that's usually how it works, and would be the basis for the creditor's claim in the 13.  Was the claim filed timely?  If not, an objection could be made so they don't get dime one from your 13 and the debt is still discharged at the end as to your husband.


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Consumer bankruptcy questions invited. I've been filing Chapter 7, 11 and 13 cases since 1985 in Calif and Arizona. I do NOT do homework questions. Let me know what state you're located in when you write. My bankruptcy practice is limited to California and Arizona but inquiries from other states are welcome. Your local jurisdiction determines exemptions. Find more background information at our website, Individual Chapter 11 and small business chapter 11 questions invited. We can also advise on the creditor's side if for example you have a fraud case, money judgment etc against someone who has filed (or is threatening) bankruptcy. We have filed and defended numerous adversary complaints in bankruptcy court and opposed trustees' demands for turnover of assets from time to time.


My partners and I have filed over 5000 consumer and small business cases to date in California and Arizona.

I've been a member of the California bar since 1984 and Arizona since 2004; also a member of the National Association of Consumer Bankruptcy Attorneys, Bankruptcy section of the Arizona State Bar, Tucson Association of Consumer Bankruptcy Attorneys, Arizona Consumer Bankruptcy Counsel and American Hellenic Educational and Progressive Association (AHEPA).

I've written a booklet on land trusts for real estate owners, players and dealers, and co-authored a special edition of "Stop Sitting on Your Assets". I was a writer of a monthly law review article relating to California real estate issues and pending and recently enacted legislation.

Attorney at law, experienced in trial procedures, adversary complaints filed and defended and numerous claims objection proceedings as well as filing cases for consumer and small business debtors.

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