QUESTION
Do I file for bankruptcy before or after the company takes legal action against me?
Asked on Oct 19th, 2011 on Bankruptcy - Colorado
More details to this question:
I was supposed to get married in January, 2012. I sent a letter, via certified mail, letting the catering hall know that I need to cancel due to financial hardship. They contacted me and told me that according to the contract, I had to cancel 6 months prior, not 3 months. If they take legal action against me (please let me know if they can), would I be able to file for bankruptcy before or after they take legal action? It's an $18,000 tab! Please let me know asap.
16 ANSWERS
Family Law Attorney serving McDonough, GA
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South Atlanta Family Law
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Yes they can take legal action against you for breach of contract. And it doesn't matter whether you file before or after they take legal action against you as long as you list them as creditors in the bankruptcy petition. However, if this debt is the only reason why you are thinking about filing bankriptcy, you should probably wait to see whether they sue you or not.
Answered on Oct 24th, 2011 at 6:14 PM
Criminal Defense Attorney serving Portland, OR
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Jacob D. Braunstein, Attorney at Law
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You have the option of filing bankruptcy either before or after the company takes legal action (assuming of course there are no other timing considerations which would affect your ability to file a bankruptcy). You should consult with a bankruptcy attorney to determine the best course of action.
Answered on Oct 21st, 2011 at 2:49 PM
Bankruptcy Attorney serving Concord, CA
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William Rubendall Attorney at Law
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You can file bankruptcy before you are sued, after you are sued, or after there is a judgment.
Answered on Oct 21st, 2011 at 2:27 PM
Daniel James Wilson
You are probably contractually liable. You might try to negotiate with them before you file BK. Do you have other debt? If you are not able to settle with them and they sue, you can file a BK later.
Answered on Oct 21st, 2011 at 2:06 PM
Bankruptcy & Debt Attorney serving Longmont, CO
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William Edward Zurinskas
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It is important to talk to competent legal counsel now to determine whether to fight the lawsuit or file bankruptcy. It is generally wise to file bankruptcy before any creditor obtains judgment on a lawsuit.
Answered on Oct 21st, 2011 at 1:58 PM
Trusts & Estates Attorney serving Camarillo, CA
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Law Offices of Larry Webb
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It depends on the rest of your financial circumstances. Such debt should be discharged, it doesn't matter if a lawsuit has been filed or not. It does matter if they file, get a default and record a judgment lien, so the sooner you file the better.
Answered on Oct 21st, 2011 at 1:43 PM
The debt is dischargeable before or after they take legal action.
Answered on Oct 21st, 2011 at 1:36 PM
Bankruptcy Attorney serving Cleveland, OH
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Benson Law Firm
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Sorry to hear about your financial difficulties and their effect on your marital plans. Filing bankruptcy either before or after a lawsuit is filed should be fine, but it would be advisable to file before taking a judgment.
Answered on Oct 21st, 2011 at 12:19 PM
Bankruptcy Attorney serving Atlanta, GA
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Jakob-Barnes Law Firm, LLC
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Whether they can take legal action against you depends on the terms of the contract. You can file for bankruptcy either before or after they take the legal action. If they start a lawsuit against you, a bankruptcy filing will stop the lawsuit.
Answered on Oct 21st, 2011 at 12:12 PM
Either way will be fine. Just make sure you list the claim on your schedule.
Answered on Oct 21st, 2011 at 11:49 AM
Information provided doesn't create an attorney/client privilege nor constitute an offer of services and is only general responses to hypotheticals
Bankruptcy Attorney serving Seattle, WA
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The Law Office of Marc S. Stern
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Yes they can file a law suit against you. Whether they will be successful is another question. The creditor has an obligation to mitigate damages. That means that they need to look for another function to cater. If you can find a replacement, that ought to solve the problem. As for filing, it does not make any difference as far as dischargeability of the debt goes. From the point of when to file, it makes more sense to file before judgment because having a judgment creates other issues. Also, will your potential spouse be included? That also makes a difference.
Answered on Oct 21st, 2011 at 12:08 AM
Chapter 13 Bankruptcy Attorney serving Bloomington, MN
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Gregory J. Wald
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I don't know if there are any special laws that govern this, but if you are just talking about the rental of the premises, the general rule would be that they can only sue you if they can't find someone else to rent the hall that day for the same price. If they rented it to someone for a lower price, they could sue you for the difference. You could file bankruptcy before or after they sued you. If this is the only debt problem that you have, it would probably make sense to wait until they sue you. Otherwise, you might have filed bankruptcy for nothing.
Answered on Oct 21st, 2011 at 12:08 AM
Bankruptcy Attorney serving Buford, GA
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Kenneth A. Parker, PC
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It depends. Assuming you have other creditors, then it might make sense to go ahead and file bankruptcy before they sue you just so you will have the peace of mind of knowing this is being handled. However, it you really don't have any other creditors, it might make sense to wait a little while before filing. The Contract would normally determine if the catering company can sue you. If they do sue you, you can then file a bankruptcy and that Bankruptcy and a Bankruptcy Attorney can file a Stay of Bankruptcy that will put the law suit on hold pending the outcome of your bankruptcy.
Answered on Oct 20th, 2011 at 11:56 PM
Glen Edward Ashman
If the contract says they can sue you, they can. Waiting until after a suit is filed is dangerous, as they can win 45 days after filing. So see a lawyer soon to evaluate your options.
Answered on Oct 20th, 2011 at 11:25 PM
Consumer Bankruptcy Attorney serving Los Angeles, CA
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Orantes Law Firm
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You can file either before or after. If you do not need to file right now, you may as well wait until after they start bothering you. If you wait until after they start legal action, you should file before they obtain a judgment as your bankruptcy proceedings will get more expensive if the judgment has to be removed from the title of any property you own. With that said, there may be other factors that would advise a filing now such as if you qualify for Chapter 7 now but will no longer qualify later, etc. You should consult a reputable bankruptcy attorney to make the appropriate determination.
Answered on Oct 20th, 2011 at 11:06 PM
First: They can take legal action against you for breaching the contract. You might want to review exactly what the contract says regarding the circumstances you describe. The catering hall may be entitled to liquidated damages for your failure to perform your end of the bargain. Second: You can file for bankruptcy either before or after they sue you. It would probably be a good idea to get your case filed ASAP. If the catering hall alleges that your cancellation was based upon fraud and they get a judgment against you based upon that allegation, the debt may not be dischargeable in your bankruptcy case. By getting your bankruptcy filed before they sue you, you will prevent them from getting that judgment against you.
Answered on Oct 20th, 2011 at 11:00 PM