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How do you collect on a debt that was charged off in bankruptcy?

How do you collect on a debt that was charged off in bankruptcy?

Full question:

Can a plaintiff in a small claims court file a claim on a defendants property they paid half of and never got paid back for and had bankruptcy where that money was on a credit card and was written off? What is the plaintiff''s position; can they file for that money from the defendant who has the property in his possession? I have had all kinds of answers about the defendant (you can not file a small claim if you know the defendant has it in bankruptcy) but what about the plaintiff? are they just stuck with the bad credit?

Category: Bankruptcy
Date: 04/07/2025
State: Nebraska

Answer:

I'm uanable to determine the plaintiff's relationship to the debtor from your question. As soon as a debtor files the proper legal documents requesting bankruptcy protection, the automatic stay takes effect. This means that all efforts by creditors to collect from the debtor are, by law, frozen, and a creditor who ignores the automatic stay faces severe penalties. It is possible for a creditor to file a petition for relief from the stay, and if granted by the court, the creditor may continue collection efforts. A debtor may also reaffirm the debt, so that the debtor agrees to pay the debt and not have it discharged in the bankruptcy.

If the creditor of a discharged debt continues collection attempts it is a violation of Federal Bankruptcy Law and subject to court sanction. A discharged debtor may send a letter telling the creditor that if it continues to try to collect funds that have been discharged under federal Law, an adversary proceeding against the creditor may be filed in the United States Bankruptcy Court. The letter should also enclose a copy of the discharge order. The bankruptcy court has the power to hold the persistent creditor in contempt of court. The court also may fine the creditor.

This content is for informational purposes only and is not legal advice. Legal statutes mentioned reflect the law at the time the content was written and may no longer be current. Always verify the latest version of the law before relying on it.

FAQs

How to file a lawsuit with no money?

Filing a lawsuit without money can be challenging, but some options exist. You may qualify for a fee waiver, which allows you to file without paying court fees. To do this, you typically need to fill out a form detailing your financial situation. Additionally, some legal aid organizations offer assistance to low-income individuals. It's also possible to represent yourself in small claims court, which often has lower fees and simpler procedures. However, consider seeking legal advice to understand your rights and options fully.

Does small claims affect your credit?

Generally, small claims judgments do not directly affect your credit score. However, if a judgment is entered against you and remains unpaid, the creditor may seek to collect it, which could lead to a collection account being reported to credit bureaus. This can negatively impact your credit score. It's important to address any judgments promptly to avoid potential credit issues.

Does small claims show up on your background check?

Small claims judgments can appear on background checks, particularly those that include civil records. While they may not show up on every type of background check, employers or landlords conducting thorough checks might see them. It's advisable to resolve any small claims issues to minimize their impact on your background history.

What happens if someone lies in small claims court?

If someone lies in small claims court, it can have serious consequences. The court may find them in contempt, which can lead to penalties. Additionally, if the lie is proven, the court may favor the opposing party. It's important to present truthful evidence and testimony, as dishonesty can undermine a case and lead to legal repercussions.

What happens if someone ignores a small claim?

If someone ignores a small claim, the court may issue a default judgment in favor of the plaintiff. This means the plaintiff wins the case without a hearing because the defendant failed to respond. The plaintiff can then take steps to collect the judgment, such as garnishing wages or placing liens on property, depending on state laws.

Does being sued in small claims court go on your record?

Being sued in small claims court can become part of your public record, especially if a judgment is entered against you. While it may not appear on your criminal record, it can show up in civil court records, which can be accessed by potential creditors, employers, or landlords. It's wise to resolve any claims to minimize their long-term impact.