When somebody files bankruptcy, is a personal loan able to still process?

Question

I lent someone money and she is going to file bankruptcy. Is a personal loan different then a collection loan?  Should I file against her after she files bankruptcy, then it becomes a new loan after the fact she files again is a personal loan different? Could I still go ahead and file in small claims court? I have legal documents with our agreement notarized and signature. Thank you for your time.

Diane Drain · Answer

You can collect on the debt until she files for bankruptcy.  No your debt is no different from a credit card or other unsecured debt.

Richard Jacobson · Answer

In all likelihood there is no certain way to protect your claim in a bankruptcy.  Your friend will have to list all the claims for money or property that are out there, and it would be a crime to omit one.  She could, conceivably, do a formal reaffirmation of the debt.  You'd do well to consult a skilled bankruptcy lawyer in your area as to how to accomplish this.  But do NOT try to sue her or take any other collection effort once she files.  That is likely a contempt of the federal count.  You will not enjoy the consequences.

Michael O'Leary · Answer

A personal loan is subject to bankruptcy discharge, just like most other financial obligations.  Do not pursue her in a State Court after she files bankruptcy, as that would be a violation of the automatic stay and could result in your being sanctioned by the Bankruptcy Court.  If you think that the loan was tainted by fraud on her part, you should look at Bankruptcy Code ? 523 to see if there is a way to get your debt declared non-dischargeable.  You will probably need a lawyer to do this, so you should discuss the matter with competent bankruptcy counsel and make a determination whether it is financially feasible to pursue her.

John Moffa · Answer

Sorry, no luck

Christopher Kane · Answer

After she files bankruptcy you are forbidden from pursuing any collection whatsoever against her.

Deborah F. Bowinski · Answer

I'm not certain I understand your question.  If you are asking whether you can still try to collect from your borrower on a private personal loan even after she files for bankruptcy, the answer is NO.  A discharge in bankruptcy relieves a borrower from the legal obligation of paying all but a very few, very specific types of debts.   If you believe that your loan should be non-dischargeable in bankruptcy then you MUST consult with a bankruptcy attorney to learn more about it.  If you take steps to try to collect a discharged debt you will be violating a federal court order which is not something to be done lightly.

Paul Ross · Answer

All debts from before the filing of a bankruptcy are supposed to be included in the bankruptcy.  If she files bankruptcy, you are not allowed to do anything to collect that debt moving forward.  That is in any way, any fashion, any indication of trying to collect on it (unless you are secured).  Filing a lawsuit after the bankruptcy would be forbidden. Discharge of debts is pretty universal.  There are exceptions for which you should visit with an attorney to determine if you qualify as an exception.

Michael Avanesian · Answer

You absolutely can't do what you said. If you sue them afterwards, you will 1. lose, and 2. get sued for violation of the discharge injunction. A personal loan, not secured by anything is probably going to be wiped out. Unless there are assets to sell.

Laura Gabel · Answer

Unfortunately, personal loans are no different from other unsecured debt (like credit card debt) and are dischargeable in bankruptcy.  The date that is relevant is when the debt arose (i.e. when the loan was made), so it would make no difference whether you file a small claim against her now or later.  If she files for bankruptcy, you are out of luck.  It is possible, though, that she is just using the "B" word to make you back off; she may have no real intention of filing for bankruptcy.

Michael McFarland · Answer

A personal loan (if it's unsecured) is just like a commercial loan; and it is generally dischargeable in bankruptcy.  If she files bankruptcy, you may not attempt to collect the debt unless you have (and file with the bankruptcy court) a valid objection to discharge - which has to be approved by the court.  Unless you do that, any attempt to collect a debt which was discharged is a violation of federal law.

Jeffrey Cogan · Answer

You need to contact an attorney because you will end up violating Bankruptcy law.   Once she files for bankruptcy, you can't sue her.  If she gets her discharge, you can never sue her.

Loren Zahn · Answer

If she lists that loan on her bankruptcy, then it will be discharged and you cannot go after her for the debt in the future.

Stuart Nachbar · Answer

Negative.  The filing of the bankruptcy stops you from filing against her.  You would have to file an adversary proceeding, if warranted, in Bankruptcy court, to prevent the discharge of the loan.

Eric Lewis · Answer

You should be very careful.  If you try in any way to collect the loan, you could be made to pay her money in sanctions.

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When somebody files bankruptcy, is a personal loan able to still process?

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