QUESTION
I was awarded a $95,000 settlement. I would like a post-settlement loan. If the defendant files for bankruptcy would I have to pay for the loan?
Asked on Dec 06th, 2011 on Debtor and Creditor - California
More details to this question:
Prior to the court trial, the defendant stated that they may file for bankruptcy. They have said nothing after the case was settled. I would like to take out a settlement loan so that I can have the full settlement instead of waiting for payments. However, I am worried that if they did file for bankruptcy in the future that I would be responsible for paying back the loan. I know that companies will do a pre-settlement loan and that the plaintiff is not responsible for paying it back if they lose their case. Does this same thing apply to my situation? Thank you for any help you can provide.
1 ANSWER
Bankruptcy Attorney serving Burbank, CA
Partner at
Law Office of Mark J. Markus
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I've never heard of a settlement loan, but if you take out a loan, you are responsible for it. Period. Somebody else's bankruptcy case does not affect your liability one way or the other. The settlement itself may be collateral for the loan, but unless it is a non-recourse loan (like first mortgages are in California), then you will be liable for any deficiency amount if you do not receive all of the settlement.
Mark J. Markus, Attorney at Law
Handling exclusively bankruptcy law cases in California since 1991.
http://www.bklaw.com/
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Answered on Dec 06th, 2011 at 10:13 PM