Expert: Terry Leeders - 7/26/2007

Question
QUESTION: I am the defendant in a lawsuit from a former employer and think Im about to get "railroaded" for $30k or so.  I am making 1/4 of what I was making previously and my debt is piling up.  If a judgement is secured against me, can I file BK7 and discharge that along with my other debts if Im able to show the courts my inability to pay?

ANSWER: It would depend on what the judgment was for.  If it was for a loan, then, absent any fraud, then it would be dischargeable in a chapter 7.

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QUESTION: It was not a loan.  It will be a judgement for selling their customers at my new company.  The bulk of it will be punative damages.  Some of it will be commissions owed due to customers returning product after I left etc.

Answer
It would be hard to say without reading the suit and the judgment itself. It might be dischargeable, but you should expect them to file an adversary.  They could argue fraud, theft of clients etc.  Therefore, you should speak to an attorney in your area and have him review the documents for a specific answer.