Camarillo, CA Bankruptcy Law Firms & Lawyers

You can be sued but the debt would have been discharged even if no notice was given if: 1. it was a Chapter 7; 2. There were no assets for the trustee to distribute (a no asset case); 3. The particular debt on which you are being sued was dischargeable; and 4. there was no specific determination by the court in an adversary proceeding that the debt was not dischargeable. You can defend the suit in the California court on the basis that you do not owe anything because of the bankruptcy discharge or reopen the bankruptcy case and bring an action for a determination that the debt was discharged, an injunction to halt the California lawsuit and for santions due to a violation of the discharge injunction. However, the first thing is to send a certified letter to the attorney representing the party suing you telling him/her that the debt was discharged (if that is the case based on what I stated above) and demanding immediate dismissal of the lawsuit. You must warn the attorney of possible sanctions by the bankruptcy court if he/she does not dismiss the case within ten days because of the violation of the permanent discharge injunction. If this sounds complicated or confusing, then you have proof that you need a lawyer to handle all this for you and you need one fast. This is indeed complicated even for lawyers who are not experienced in bankruptcy law and civil litigation at the same time. There is only a 30-day period to answer the lawsuit after being served with the summons and complaint. You must avoid having a judgment by default entered against you by the California court for failure to answer the lawsuit if you can not get the party suing you to dismiss the case right away. All this because you did not include all the creditors in your bankruptcy petition as required and provided them notice!

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.

If you are farther enough behind that you are sued and a judgment is entered against you, it can be executed against personal property that has equity above the liens and exemptions. In the case of the car, that would mean its value would have to exceed the loan against it plus your state exemption of $3,500. So, it is unlikely that you would lose your car based on student loans or other debt.