QUESTION
Do we qualify for bankruptcy if the lawsuit was for a business we purchased and had to default on?
Asked on Jul 08th, 2014 on Bankruptcy - Idaho
More details to this question:
In a lawsuit, my husband and I settled on an amount of $40,000, $20,000 down, $1,000 a month for 20 months. We paid the $20,000 down and have paid $4,000 of the monthlies. Well, my payment is late this month, because we've had some medical issues in the family, so now they added an extra $20,000 as the stipulation called for. I'm thinking of just filing bankruptcy on the remaining $16,000 and now the extra added $20,000. This judgment is in the state of California, we live in Washington State. We own our house outright. I was wondering if we can qualify for a bankruptcy (the lawsuit was for a business we purchased and had to default on).
9 ANSWERS
I am not licensed to practice in either of those States. You should consult with a bankruptcy attorney where you live.
Answered on Jul 11th, 2014 at 3:08 AM
Bankruptcy Chapter 7 Attorney serving Los Angeles, CA
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The Law Offices of Peter M. Lively
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From the facts you provided the breached settlement agreement appears to be subject to discharge. However, owning your house free and clear of liens might mean that your exemptions to not fully cover your assets and Chapter 7 may not be advisable. You need a consultation with a bankruptcy attorney to review all of your assets, debts, income and expenses.
Answered on Jul 11th, 2014 at 2:59 AM
A civil judgment is dischargeable in bankruptcy, and the Washington homestead exemption allows you to protect up to $125,000 of value in your home. So, if your home exceeds that value, you might consider filing a Chapter 13 which would allow you to "pay for" the non-exempt value over a period up to 5 years. Your "non-exempt assets" would set a minimum you would have to pay, also referred to as the "best interest of creditors number" because it defines what the creditors would be able to get in a Chapter 7 liquidation. If your homestead does not exceed the maximum, then you might be eligible for a Chapter 7 depending on your income and other assets.
Answered on Jul 10th, 2014 at 1:30 PM
Bankruptcy Attorney serving Seattle, WA
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The Law Office of Marc S. Stern
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Qualification for bankruptcy isn't the issue. It is impossible to tell whether you would pass the means test from the information given. More importantly, what is the house worth? What are the other assets worth? You might file a bankruptcy, get the discharge, and have your house sold by the trustee. Much more information is needed. You need to seek the advice of a competent bankruptcy lawyer and discuss the matter with them.
Answered on Jul 10th, 2014 at 12:30 PM
Immigration Attorney serving Arlington, TX
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Law Office of Pho Ethan Tran, PLLC
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Business related debts are also dischargeable in bankruptcy as long as there was no finding of fraud in the dispute.
Answered on Jul 10th, 2014 at 12:16 PM
Bankruptcy Attorney serving Walnut Creek, CA
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Alan E. Ramos Law Offices
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You need to see a Washington state bankruptcy attorney to determine what the outcome of a bankruptcy would be.
Answered on Jul 10th, 2014 at 11:17 AM
Commercial & Bankruptcy Law Attorney serving Powell, OH
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Ronald K. Nims
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Washington State has a $125,000 homestead exemption - I'm not an expert in Washington law but that generally means that a married couple have two $125,000 exemptions for a total of $250,000. As long as your house isn't worth more than $250,000, you can file bankruptcy in Washington discharge the debt for the business and keep your house.
Answered on Jul 10th, 2014 at 10:51 AM
Regulatory Attorney serving Spokane, WA
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Deissner Law Office, P.C.
You should be able to file bankruptcy on that claim based on what you say here. Doesn't matter that it was a business debt.
Answered on Jul 10th, 2014 at 10:25 AM
bankruptcy Attorney serving Paul, ID
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Paul N. J. Ross Law, PLLC
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I don't know Washington law, but I would want to know more about the judgment and what the agreement was on. Generally, it sounds like it would be discharged in the bankruptcy. Moreover, if you file soon enough, the Trustee can recover some of the funds paid to the creditor and distribute it to other creditors.
Answered on Jul 10th, 2014 at 8:39 AM