Mill Valley, CA Bankruptcy Law Firms & Lawyers

A Chapter 11 filing normally means the company will continue to operate, continue to pay its employees, and is attempting to restructure its old debt into more manageable payments.

Bankruptcy is a very complicated process. It is wise to talk to an experienced bankruptcy attorney before deciding to take this important step. Most Arizona bankruptcy attorneys offer a free consultation about the basics of bankruptcy.

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!