QUESTION
Is there anything that can be done to exclude my promissory note from his filing?
Asked on Dec 13th, 2012 on Bankruptcy - California
More details to this question:
I loaned a friend in 2009 $12,000. Until now, Dec. 13th 2012, he has always made payment. This week I received an email telling me that his financial advisor told him he may have to file bankruptcy due to hardship. I will be out almost $4,800 if he files. Is there anything that can be done to exclude my promissory note from his filing? I am on disability and this income is detrimental to my ability to survive.
14 ANSWERS
Appellate Attorney serving Grosse Pointe Farms, MI
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Musilli Brennan Associates, PLLC
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Your friend, if the files bankruptcy, will have the option of "re-upping" his obligation to you. It cannot be compelled.
Answered on Dec 17th, 2012 at 12:59 PM
William H. Von Willer
No, it needs to be included, however, you can ask him to reaffirm the debt.
Answered on Dec 17th, 2012 at 3:35 AM
Bankruptcy Attorney serving Phoenix, AZ
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Law Office of D. L. Drain, P.A.
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Probably not, the only exception with a debt this old is fraud. Even that will be close to impossible to show. Had you secured the debt then you would at least have the collateral; but with an unsecured debt you only have the word of the borrower. The borrower can always voluntarily pay you after the bankruptcy is over. Sorry that I do not have better news.
Answered on Dec 17th, 2012 at 3:31 AM
Bankruptcy Attorney serving Plantation, FL
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Moffa & Breuer, PLLC
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Probably not.
Answered on Dec 14th, 2012 at 10:57 PM
Unfortunately, it does not sound like there is a reason why your debt would not be dis chargeable. However, you should really speak to an attorney about this issue.
Answered on Dec 14th, 2012 at 3:49 PM
No, bankruptcy laws require a person to list all their debts. Your friend could chose to pay you after the bankruptcy is over, but I wouldn't hold my breath about that happening. Another problem could occur if he continues to pay you up until the time he files bankruptcy, because the bankruptcy trustee could sue you to recover any money paid to you in the months before filing a bankruptcy in order to divide up the money equally among all of his creditors.
Answered on Dec 14th, 2012 at 3:48 PM
Bankruptcy Chapter 7 Attorney serving San Diego, CA
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Law Office of Asaph Abrams
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Given the consistent payment history, it doesn't sound like you'd have the rare valid basis to object to the dischargeability of the debt in bankruptcy (nor would the outstanding amount likely merit that course of action). If he files chapter 7 bankruptcy, he is not precluded from paying you after the bankruptcy, notwithstanding discharge of the debt. He may choose to do so. Within certain circumstances and time frames, significant payments by a debtor before a bankruptcy filing that favor one creditor to the detriment of another creditor, may allow a bankruptcy trustee to recover the payments and redistribute them on a fair basis among different creditors. However, If historically paid at a rate of about $200/mo., the amount in question here is not likely significant enough to beg adverse action prompted by such preferential treatment. This answer (by San Diego bankruptcy attorney, Asaph Abrams) doesn't address all facts & implications of the question; it's general info, not legal advice to be relied upon. It creates no attorney-client relationship; it may be pertinent to CA and/or its Southern District Bankruptcy Court only, and it's independent of other answers. It may be time sensitive, as in past the "Use by" date: laws and case law change. Hire legal counsel before acting or refraining from bankruptcy/legal action.
Answered on Dec 14th, 2012 at 1:51 PM
Richard hirsh
A debtor is required to include all debts in his bankruptcy. There are procedures available to you as a creditor which can prevent your debt from being discharged. Those may include fraud or misrepresentation issues or some misconduct in the bankruptcy. Those procedures are probably more costly than the debt however. Certain debts might be nondischargeable for other reasons. You have not provided much information however so I cannot provide any further insight.
Answered on Dec 14th, 2012 at 1:34 PM
Chapter 13 Bankruptcy Attorney serving Winston-Salem, NC
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Love and Dillenbeck Law
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Unfortunately, this sounds like an unsecured debt. There is nothing you can do to "exclude" the debt from his filing. If there is an allegation of fraud (although in this case it sounds like there isn't), then you can ask the Court to not discharge it. Otherwise, you need to to Contact Legal Aid to see if they can give you advice as to what you need to do after he files.
Answered on Dec 14th, 2012 at 1:33 PM
Daniel James Wilson
Unless the promissory note is a secured debt it is dischargeable.
Answered on Dec 14th, 2012 at 1:33 PM
Alternative Dispute Resolution Attorney serving Ventura, CA
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Zahn Law Office
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If he includes your debt in his filing, then you can file and adverse complaint to be excluded from the discharge, but that doesn't guarantee that this will happen. If you are a listed creditor, I suggest talking to an experienced bankruptcy attorney regarding this issue.
Answered on Dec 14th, 2012 at 1:33 PM
Bankruptcy Law Attorney serving Livingston, NJ
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Law Office of Stuart M. Nachbar, P.C.
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In NJ, Unless he pledged collateral (security) for it, then you are a general unsecured creditor. Chances are there was none (collateral) and the Promissory Note does not create a Secured Status, therefore, Unless he files a Chapter 13, and makes you a special category in the Plan, (which most trustee?s balk at), chances are you will be out the money.
Answered on Dec 14th, 2012 at 1:32 PM
Bankruptcy Attorney serving Walnut Creek, CA
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Alan E. Ramos Law Offices
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Your friend is required by law to include all of his assets and liabilities. If he were to leave out his debt to you, he could subject himself to a revocation of his discharge and possibly criminal charges. He has no choice but to include you in his bankruptcy. If, in the future, he decides that he would like to pay you, there is nothing to prohibit him from doing so. However, he would have no legal obligation to pay you and you would be prohibited by law from making any demands on him for payment.
Answered on Dec 14th, 2012 at 1:23 PM
Criminal Defense Attorney serving Deltona, FL
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R. Jason de Groot, P.A.
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No, and trying to do something about it after he files bankruptcy could subject you to a harsh penalty. Stay in touch with the friend you loaned the money to and find out for sure if he is actually considering filing bankruptcy. It costs money to do this.
Answered on Dec 14th, 2012 at 1:23 PM