I live in WA state and filed a action in small claims court in OR against a
person that I had contracted with to perform some work. The charges I
brought were fraud, breach of contract and negligence. On the Friday before
our Monday court date, he filed for chapter 7. Luckily I called the court
on Friday afternoon and found out in time to prevent a wasted trip to OR. I
then received a letter from the court telling me that me action could not
proceed because he filed for chapter 7. Since the amount is not that large,
(3k) I've been handling this without the benefit of an attorney but now I do
need some advice on how or if I can pursue this action. Any help would be
greatly appreciated.

An automatic stay against any court proceedings and collection action
against this person is now in place. You cannot attempt to collect the debt
owed to you at this time, nor can your case in small claims proceed. If you
have objections to the discharge or wish to present your claim, attend the
First Meeting of Creditors (aka 341 hearing) and state your objections to
discharge to the trustee. You should be notified of this meeting. If not,
contact the bankruptcy court where he filed and find out when the meeting
is scheduled.

By the way, if he did _not_ list you as a creditor, your debt _may_ be
exempt from discharge. You should talk to a bankruptcy attorney about that.
Otherwise, you do not need legal representation to appear at the meeting of
creditors.

Ben Magista wrote:
I live in WA state and filed a action in small claims court in OR against a person that I had contracted with to perform some work. The charges I brought were fraud, breach of contract and negligence. On the Friday before our Monday court date, he filed for chapter 7. Luckily I called the court on Friday afternoon and found out in time to prevent a wasted trip to OR. I then received a letter from the court telling me that me action could not proceed because he filed for chapter 7. Since the amount is not that large, (3k) I've been handling this without the benefit of an attorney but now I do need some advice on how or if I can pursue this action. Any help would be greatly appreciated.

Couldn't he also file for relief from stay to proceed with this action
in a non-bankruptcy forum?

Sofia

On Sun, 14 Dec 2003 00:16:57 GMT, John <jmeola75@hotmail.com> wrote:
An automatic stay against any court proceedings and collection actionagainst this person is now in place. You cannot attempt to collect the debtowed to you at this time, nor can your case in small claims proceed. If youhave objections to the discharge or wish to present your claim, attend theFirst Meeting of Creditors (aka 341 hearing) and state your objections todischarge to the trustee. You should be notified of this meeting. If not,contact the bankruptcy court where he filed and find out when the meetingis scheduled.By the way, if he did _not_ list you as a creditor, your debt _may_ beexempt from discharge. You should talk to a bankruptcy attorney about that.Otherwise, you do not need legal representation to appear at the meeting ofcreditors.Ben Magista wrote: I live in WA state and filed a action in small claims court in OR against a person that I had contracted with to perform some work. The charges I brought were fraud, breach of contract and negligence. On the Friday before our Monday court date, he filed for chapter 7. Luckily I called the court on Friday afternoon and found out in time to prevent a wasted trip to OR. I then received a letter from the court telling me that me action could not proceed because he filed for chapter 7. Since the amount is not that large, (3k) I've been handling this without the benefit of an attorney but now I do need some advice on how or if I can pursue this action. Any help would be greatly appreciated.

On Sun, 14 Dec 2003 00:22:47 GMT, Sofia <sofiaharlow@yahoo.com> wrote:
: Couldn't he also file for relief from stay to proceed with this action
: in a non-bankruptcy forum?

And then file an adversary for a 523(a)(2) objection to discharge
(fraud)? Sounds like a plan. Now...things didn't get very far along
in small claims before he filed.... What's your take on the likelihood
of the BR court's abstaining to (assumption) await the determination
of fraud in the small claims action? Do you think the likelihood of
absention is lessened if the creditor opens a 523(a)(2) adversary?

Yikes! Are you asking ME? I'm not a lawyer. I am not quite sure how
these things work TOGETHER. I also do not know about a judge
abstaining in the BK case because of the fraud claim.

Are you asking that if he gets relief from stay and the state court
finds in his favor that the BK judge would say, OK you've got your
fraud under 523(a)(2) so it's non-dischargeable? Can he then proceed
to COLLECT on the judgment or is the collection subject to the Stay?
Is a fraud judgment in state court prima facie evidence for the BK
court that the debt is non-dischargeable under 523(a)(2)? I don't
know. If I were a judge and granted relief from stay would I wait to
see what the state court said on this issue? I don't know. Say
creditor gets a judgment in state court but the BK judge decides
differently and it's dischargeable; then creditor just has to get in
line as a judgment creditor, right? I don't know.

HELP! I need as much help as this creditor. My final in BK is on
Thursday the 18th.

Sofia,
Not a lawyer, and the above is not to be construed as legal advice.




On Sun, 14 Dec 2003 11:37:07 GMT, hgoldste@mpcs.com (Howard Goldstein)
wrote:
On Sun, 14 Dec 2003 00:22:47 GMT, Sofia <sofiaharlow@yahoo.com> wrote: : Couldn't he also file for relief from stay to proceed with this action : in a non-bankruptcy forum?And then file an adversary for a 523(a)(2) objection to discharge(fraud)? Sounds like a plan. Now...things didn't get very far alongin small claims before he filed.... What's your take on the likelihoodof the BR court's abstaining to (assumption) await the determinationof fraud in the small claims action? Do you think the likelihood ofabsention is lessened if the creditor opens a 523(a)(2) adversary?

On Sun, 14 Dec 2003 12:26:42 GMT, Sofia <sofiaharlow@yahoo.com> wrote:
: Yikes! Are you asking ME? I'm not a lawyer.

yet

: I am not quite sure how these things work TOGETHER.

I'm not sure I'm going to be pointing you in the right direction either,
but here we are

: I also do not know about a judge abstaining in the BK case because
: of the fraud claim.

Note the concurrent jurisdiction with state court, and see 305(a)(1).
Maybe read the statute through the prism of conventional Fed
abstention doctrine as applies to any state law controversy, but for a
twist consider what if anything this non-article III court can compel
a state court to do?

: Are you asking that if he gets relief from stay and the state court
: finds in his favor that the BK judge would say, OK you've got your
: fraud under 523(a)(2) so it's non-dischargeable?

Are we in a chapter 7 and there's an order in the file excepting this
debt under 523(a)(2)(A)? 727(b) has the consequences, but the debtor
might have an option...


: Can he then proceed
: to COLLECT on the judgment or is the collection subject to the Stay?

That's a good question. If you're the creditor's counsel you
hopefully drafted the abstention order with language specifically
lifting the stay against a whole lot more than just the narrow
determination of a state law question, yes? Maybe some of the other
folks will jump in here. But if the debtor's in a 7 and the case is
still open, how likely is the debtor to have anything non-exempt to
execute on?

: Is a fraud judgment in state court prima facie evidence for the BK
: court that the debt is non-dischargeable under 523(a)(2)? I don't
: know. If I were a judge and granted relief from stay would I wait to
: see what the state court said on this issue? I don't know. Say
: creditor gets a judgment in state court but the BK judge decides
: differently and it's dischargeable; then creditor just has to get in
: line as a judgment creditor, right? I don't know.
:
: HELP! I need as much help as this creditor. My final in BK is on
: Thursday the 18th.

> If you have objections to the discharge or wish to present your claim, attend the First Meeting of Creditors (aka 341 hearing) and state your objections to discharge to the trustee.

While it may be valuable to attend the Meeting of Creditors, stating
objections at this meeting is likely to have no impact. If you wish to
contest the dischargeablility of your debt (for example, if it was obtained
by fraud), it will be necessary to file a formal objection to discharge.
Telling the trustee won't do it.

--
Brett

************************************************** ***************
* Personal Injury/Malpractice Bankruptcy *
* *
* BRETT WEISS, P.C. *
* Attorneys at Law *
* Maryland, D.C. and Federal Bars *
* lawyer@erols.com *
* http://www.erols.com/lawyer *
* *
* Small Business Estates & Estate Planning *
************************************************** ***************

The Small Print: This response is for discussion purposes only. It isn't
meant to be legal advice and you shouldn't treat it as such. If you want
legal advice, speak with a local lawyer familiar with your state's laws who
can review *all* of the facts and the law applicable to your situation.
************************************************** ***************

Actually, you must first obtain 523 relief, and only then can you file for
relief from the stay.

--
Brett

************************************************** ***************
* Personal Injury/Malpractice Bankruptcy *
* *
* BRETT WEISS, P.C. *
* Attorneys at Law *
* Maryland, D.C. and Federal Bars *
* lawyer@erols.com *
* http://www.erols.com/lawyer *
* *
* Small Business Estates & Estate Planning *
************************************************** ***************

The Small Print: This response is for discussion purposes only. It isn't
meant to be legal advice and you shouldn't treat it as such. If you want
legal advice, speak with a local lawyer familiar with your state's laws who
can review *all* of the facts and the law applicable to your situation.
************************************************** ***************


"Howard Goldstein" <hgoldste@mpcs.com> wrote in message
news:1071401827.53061@news.queue.to... On Sun, 14 Dec 2003 00:22:47 GMT, Sofia <sofiaharlow@yahoo.com> wrote: : Couldn't he also file for relief from stay to proceed with this action : in a non-bankruptcy forum? And then file an adversary for a 523(a)(2) objection to discharge (fraud)? Sounds like a plan. Now...things didn't get very far along in small claims before he filed.... What's your take on the likelihood of the BR court's abstaining to (assumption) await the determination of fraud in the small claims action? Do you think the likelihood of absention is lessened if the creditor opens a 523(a)(2) adversary?

On Mon, 15 Dec 2003 13:26:41 -0500, Brett Weiss <lawyer@erols.com> wrote:
: Actually, you must first obtain 523 relief, and only then can you file for
: relief from the stay.

I'm not sure I understand how to apply this to Sofia's example. Are
you saying that while the case is open the creditor needn't seek to
lift the stay to continue its state court prosecution to determine
whether the pre-petition debt was procured through fraud, and it only
needs to seek lifting if it wants to collect on the state court
judgment?

Normally, the stay won't be lifted in such cases unless the 523 action is
first filed and decided. Unless there is a 523 proceeding, the debt is
discharged.

--
Brett

************************************************** ***************
* Personal Injury/Malpractice Bankruptcy *
* *
* BRETT WEISS, P.C. *
* Attorneys at Law *
* Maryland, D.C. and Federal Bars *
* lawyer@erols.com *
* http://www.erols.com/lawyer *
* *
* Small Business Estates & Estate Planning *
************************************************** ***************

The Small Print: This response is for discussion purposes only. It isn't
meant to be legal advice and you shouldn't treat it as such. If you want
legal advice, speak with a local lawyer familiar with your state's laws who
can review *all* of the facts and the law applicable to your situation.
************************************************** ***************


"Howard Goldstein" <hgoldste@mpcs.com> wrote in message
news:1071532606.11249@news.queue.to... On Mon, 15 Dec 2003 13:26:41 -0500, Brett Weiss <lawyer@erols.com> wrote: : Actually, you must first obtain 523 relief, and only then can you file
for : relief from the stay. I'm not sure I understand how to apply this to Sofia's example. Are you saying that while the case is open the creditor needn't seek to lift the stay to continue its state court prosecution to determine whether the pre-petition debt was procured through fraud, and it only needs to seek lifting if it wants to collect on the state court judgment?

On Mon, 15 Dec 2003 22:18:38 -0500, Brett Weiss <lawyer@erols.com> wrote:
: Normally, the stay won't be lifted in such cases unless the 523 action is
: first filed and decided. Unless there is a 523 proceeding, the debt is
: discharged.
:

OK I see what happened, you were following up to the first post

<1071401827.53061@news.queue.to>

::
:: Couldn't he also file for relief from stay to proceed with this action
:: in a non-bankruptcy forum?
:
: And then file an adversary for a 523(a)(2) objection to discharge
: (fraud)? Sounds like a plan.

You're saying it's necessary to do it the other way around in time,
which is correct. I can't imagine any situation where the stay would
be lifted to continue state ct proceedings on the claimed prepetition
fraud we're talking about without there first being an 523 adversary
but maybe 4:50AM is too early in the morning for me to be very
imaginative.