QUESTION
Can I get my money back for a promissory note if the debtor filed for bankruptcy?
Asked on Jul 10th, 2012 on Bankruptcy - California
More details to this question:
I have a promissory note but the debtor filed for bankruptcy. The note states that it would be personally guaranteed. Is there any way that I can get my money back?
6 ANSWERS
Bankruptcy Attorney serving Oakdale, CA
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Law Office of Todd Whiteley
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If your promissory note is not supported by some type of lien, then the debt is unsecured. Unsecured debt will be discharged via bankruptcy. Unfortunately, a personal guarantee is not a form of collateral. Whenever possible secure any loans with collateral property whose value significantly exceeds the amount of the loan given. Secured debt is not able to be discharged in bankruptcy, and the borrower has incentive to repay the loan or lose the collateral property.
Answered on Aug 08th, 2012 at 4:41 PM
If his BK was filed as an individual, then no, his personal guarantee of the note is discharged along with the debt. If the debt was secured against property, you may still have recourse as to the property only, but not as to the individual.
Answered on Aug 08th, 2012 at 11:53 AM
Criminal Law Attorney serving Fremont, CA
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Steven J. Alpers, A Professional Corporation
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Only if the note was guaranteed by collateral such as a house or a car. Then you could ask the bankruptcy court to allow you to take the collateral.
Answered on Aug 08th, 2012 at 11:29 AM
Civil Rights Attorney serving Fresno, CA
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Law Office of Kevin G. Little
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If the promissory note is secured by other assets or real property, you stand a better chance to recover than if the debt is unsecured. It would also depend on whether the bankruptcy is a chapter 7, 11 or 13. In a chapter 7 liquidation, debts are usually discharged with the debtor having to pay little or nothing toward a particular debt, whereas in chapter 11 or 13, there is a repayment or reorganization plan that is established.
Answered on Aug 07th, 2012 at 11:31 PM
Criminal Defense Attorney serving Calabasas, CA
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Law Office of Bernal P. Ojeda
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The debtor that filed bankruptcy cannot pick and choose which debt he will pay back. You could put a reaffirmation agreement together where he reaffirms the debt. However, the bankruptcy judge would have to approve the agreement.
Answered on Aug 07th, 2012 at 11:27 PM
Immigration Attorney serving Arlington, TX
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Law Office of Pho Ethan Tran, PLLC
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Unfortunately, unless the debt is secured or the debtor has assets that can be sold and distributed, the chances of you recovering any money back from the loan is very slim.
Answered on Aug 07th, 2012 at 11:27 PM