If someone files for bankruptcy, they are legally required to tell their creditors and other parties involved in the case what has happened. That includes telling them why they filed for bankruptcy.
The reason people file for bankruptcy varies from person to person. Some people have financial problems because of medical bills or job loss.
Others may be facing foreclosure on their home. People may owe money to credit card companies or student loan lenders.
Even so, can you sue someone who has filed Chapter 7, and what even is it? Read on to find out!
Chapter 7 Bankruptcy is Not Actually a Crime
You cannot sue someone who has filed for Chapter 7 bankruptcy. This means that if someone files for bankruptcy, you cannot take them to court and try to get your money back.
This doesn’t mean you can’t try to collect any debts owed to you by the bankrupt party. If you have a contract with someone, then you can still go after them for payment. But you can’t sue them for damages or anything else.
Are There Any Special Circumstances?
It’s true that you can’t sue someone who has filed bankruptcy. However, there are some exceptions. For example, if someone owes you child support payments, you can ask a judge to order the person to pay those payments directly to you.
In addition, you can also sue someone who has filed chapter 7 for fraud. Fraud occurs when someone makes false statements to deceive another person.
In this situation, the person making the false statement would be liable for any damage done as a result of the lie.
For example, if you were told that an investment was guaranteed to make you $100,000 per year, but instead made only $10,000 over five years, you could sue the person who sold you the investment for fraud.
What About Other Types of Bankruptcy?
There are two more types of bankruptcy: Chapter 13 and Chapter 11. These are both very different from Chapter 7.
Chapter 13 allows you to keep all of your assets while paying off some of your debt. It’s similar to a mortgage modification program. You can use Chapter 13 to reduce your monthly payments and eventually pay off your entire balance.
Chapter 11 is used when businesses want to reorganize their finances. They can do this by selling part of their business, or by taking out loans against future earnings.
How to Go After Payment
If you want to pursue payment for something like a debt or unpaid wages, you will need to find out where the bankrupt party lives. Then you’ll need to send them a letter asking for payment.
Some states require you to send this letter at least 30 days before you start taking action against the debtor. Other states don’t have such rules. In most cases, though, you should wait at least 60 days before sending the letter.
Some states also allow you to serve the notice by mail. However, some states only allow service by certified mail. So make sure you check with your state’s laws before proceeding.
Once you’ve sent the letter, you’ll need to follow up. Most likely, the debtor won’t respond right away. They might ignore the letter completely. Or they might write back saying they’re sorry but they can’t pay you.
In either case, you’ll need to keep following up until you get an answer. Don’t give up! Keep trying until you get paid.
What Happens When You Can’t Collect Money?
If you can’t collect payment from a bankrupt party, you can still try to recover your losses through the courts.
However, there is no guarantee that you’ll win. Even if you do win, you might not get all of your money back. And you might not get as much as you were originally promised.
So if you’re going to sue someone who has filed chapter 7 bankruptcy, you’d better be prepared to lose some money.
What Happens During A Chapter 7 Bankruptcy?
A person who has filed for Chapter 11 bankruptcy will likely face some restrictions when it comes to how much debt they can carry. They might also lose certain assets like cars and homes.
But there are no such limitations on a person who has filed for bankruptcy under Chapter 7. In fact, most people who file for Chapter 7 bankruptcy do not have to sell off any property. And they don’t have to give up any assets either.
The main goal of Chapter 7 bankruptcy is to help people pay off as many debts as possible. To accomplish this, the debtor must file an automatic stay. This stops all collection efforts against the debtor while they work out a repayment plan with their creditors.
In addition, a person who has filed Chapter 7 bankruptcy will have to make regular payments to the trustee. These payments are called disposable income.
It’s important to note that the amount of disposable income a person makes depends on the type of bankruptcy they file.
For example, a person who has been discharged under Chapter 13 would probably have more disposable income than one who has been discharged under Chapters 7 or 11.
How Can I Find Out Whether Someone Has Filed Bankruptcy?
There are two ways you can find out whether someone has filed for bankruptcy:
1. Check online records
2. Ask the person directly
Checking Online Records
You can check online records at the U.S. Courts website. Just search for the name of the individual you want to see.
For example, if you wanted to see if someone had filed for bankruptcy, you could enter the name into the search box at the top of the page. Then click on the link for the results.
When you look through the list of cases, you should be able to determine whether anyone has filed for bankruptcy.
Ask the Person Directly
If you think someone has filed for bankruptcy, but aren’t sure, you can ask them directly.
If you suspect that someone has filed for bankruptcy and they deny it, you can call the local bankruptcy court in their area. Most courts have telephone numbers listed somewhere on their websites.
If you suspect that someone has already filed for bankruptcy, you can contact the court where they were originally filing.
Your best bet is to start with the court closest to where the person lives.
Final Thoughts
Whilst in most cases you cannot sue somebody who has filed Chapter 7, there are circumstances when you can. However, never expect to receive the full amount of money you were hoping for.
If you are unsure about whether you can sue somebody who has filed for bankruptcy, then ask a lawyer for advice.
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