I have been listed as a Creditor in a Chapter 7 Bankruptcy Filing. My former tenant (Rocky) owes me around $4,000 in back rent, damages and late fees. I have sued him and won, however after I won he filed Ch 7. During the court hearings his boss/employer testified that Rocky could work any time he wanted, but had chosen not to. Rocky has no medical conditions that I know of, his only defense in court was that he couldn’t find work. He held that defense until his boss testified, then switched to “I can’t get a ride to work” (drunk driving conviction). He lives with his brother who also works for the same guy, they are both drywall contractors. Rockies boss told me that Rockies brother pulls down about $90,000 a year and that Rocky could do the same if he worked. He also told me that he has offered to put Rocky and his brother on the same crew so Rocky could get a ride to work.
Armed with sworn testimony that Rocky can work any time he wants and make good money in the process do I have a snowballs chance in hell of getting any of my money back? Will the trustee allow or even consider such facts as the Debtors ability to earn an income?
I have a Creditors meeting on May 4th, I have never been to such an event so I do not know what to expect. I am considering hiring an attorney to represent me at the hearing, but do not want to do so if I have no chance of winning, you know cut my losses. On the other hand since I know Rocky has an attorney, I feel like I will be way out gunned if I try to go it alone.
Sounds like a $4000 tutition payment in the business scholl of hard knocks.
I’m neither an accountant, attorney nor a judge. But from my perspective, you may do well to consider a more expedient method of making back the $4,000 loss.
He means it’s unlikely that you will get your money back from the bankrupt so just work harder on your business because hiring an attorney in this situation would be throwing good money after bad.
Might be worth going to the hearing to see if this guy has any assets. Those should be sold to pay off creditors, but there is probably not be very much there that you can use to recover your money.
So your saying that is doesn’t matter that I have sworn testimony that the guy has an open invite to work any time he wants but chooses not to? If that is that case our bankruptcy laws suck, I sure hope the new laws give small guys like me more protection casue this BLOWS.
figure out a way to make $4000- sell somethng on E-Bay, get a part time job, recycle scrap, do some kind of a real estate deal that nets you $4K, roll the dice on the market- figure out a good way to make the money back and call it a wash.
Chapter 7 is liquidation, not reorganization. All you can hope for is a piece of the pie. So, if this guy has non-exempt assets that are seized and sold, you as a creditor are entitled to some of the proceeds (depending on the ‘seniority’ of your claim). Unfortunately, most people that file CH7 don’t have any assets, so they get a clean slate and you’re screwed. I agree it doesn’t seem fair. They should have debtor’s prison for these people, or something.
One other thing. Be careful about any contact you might have with this dude. If I’m not mistaken, once the papers are filed, creditors are required to leave the debtor alone. No wage garnishments, lawsuits, demands for payment, etc. You don’t want to find yourself in trouble.
I recommend at least consulting an attorney. Even if you don’t pursue the matter, you’ll know exactly where you stand (from someone who KNOWS as opposed to all of us). And you might be able to get something back.
Based on what you’ve described, I’d say you have an extremely small chance of getting the case dismissed as a bad faith filing, but the law is not on your side. If he is insolvent and has other creditors, I wouldn’t waste my time or money. Also based on what you’ve described, I don’t see any grounds for having your claim declared nondischargeable. This would be possible if, for example, the debt was incurred fraudulently or by breach of fiduciary duty by the debtor.
In sum, Tom’s advice is right. Move on, and don’t get yourself into that position again.
I was actually just interpreting what Tom said, but I would certainly agree that sworn testimony doesn’t necessarily mean anything in court. I really don’t know the exact chance of prevailing in a personal bankruptcy, but $4000 doesn’t buy you very much in legal fees, and my understanding is that unsecured creditors rarely do well in bankruptcy cases. But, I don’t know your exact situation and am not providing you with legal advice.
I think what they are saying is that just because you get a judgement against someone doesn’t mean you will collect anything. Some people are pretty judgement proof (no assets). They are saying deduct the loss from your taxes and you can at least recover part of it, and move on. I am also not a lawyer, accountant etc. Just a small businessman that occasionaly deals with deadbeats - and yes it does blow.
You are out, and even making an attempt to claim the debt will put you in non compliance with his protection federally in a chapter 7 bankruptcy. If you are mentioned as a discharged debt there is not a single thing you can do. Like Tom has mentioned to you in previous threads move on before you you take a $7000 loss instead of a $4000 one. A chapter 7 in a nutshell protects him from any creditor period unless he took specific action in the court to reaffirm his debt with you. If not, you get nothing. Simple as that.
“figure out a way to make $4000- sell somethng on E-Bay, get a part time job, recycle scrap, do some kind of a real estate deal that nets you $4K, roll the dice on the market- figure out a good way to make the money back and call it a wash.”
hey tom,
how about you send me a P3C. Of course it will cost you $4k but just sell stuff on ebay, get a part time job, recycle scrap, do some kind of real estate deal that nets you 4k, roll the dice on the market. Just figure out a good way to make the money back and call it a wash. After you make it back and you can consider this whole thing a no-loss kind of deal. Plus you made somebody really happy, might be worth it
sorry tom, just couldn’t resist. joking aside, I just couldn’t believe my eyes what you wrote. I mean this guy is in the process of being screwed 4k!!
and btw, I really like and appreciate all of your reviews about bikes.
that really sucks. I don’t know much about Ch7 & CH13 filings. But wouldn’t it be pretty stupid for this guy to file CH7 if he only owes $4k. Of course, he could also owe money to others.
Given the cirumstances, that he owes money AND has the ability to work but doesn’t choose to do so is very irresponsible. Is there any way to find out how much money he owes in total (to you and others). I simply cannot believe that somebody owes $4k, has the ability to work but instead files for Ch7.
just some general questions:
can you un-file Ch7?
what are the consequences of Ch7? (he must have trouble qualifying for future loans, etc.??)
If he doesn’t owe too much in total and it is possible to unfile his Ch7. I don’t know if that is possible, but if it were, you might want to consider giving him a deal. Inform yourself about the consequences a person faces with a Ch7 on the record. Confront him with his options and find a solution. Maybe you guys can settle on $2500 or so. Again, I’m no expert but do feel your pain. At the moment I would consider the $4k lost and whatever you get out of it is a bonus. It’s definitely not fair to all the other hardworking, responsible individuals. Consult a lawyer, think whether it is worth to choose that path and learn a lesson from it. Best of luck!
Lets say I were employed making 60-80K a year, but rented an apartment, making occasional payments on a car, and a damn nice bike, a swim suit and pair of running shoes. I spend all of extra cash on training, races fees travel to races in exotic places and eat and drink away all my money. So in a nut shell I have little assets, but I am one hell of a traveling triathlete. My bike and all my tri goodies of course were put on credit cards, and of course only making 60-80K a year there is no way I could afford all those trips to Hawaii and France and Australia and every other race destination in the world, so those expenses went on my CC’s also. And just for fun to bring the story full circle I decide that I am going to screw my landlord and not pay him for 4 months while the slow acting courts evict me. Grand total I owe close to $75,000 of debt to the various CC’s and my landlord, the car Co. and anyone else nice enough to loan me money.
So now all I need to do is file Ch 7 the $75,000 disappears forever. The Hasbeenswimmers of the worlds are screwed out of hard earned money. And I go along my merry way like nothing happened because I have a nice job pulling in a good dime and for the most part my life style won’t be effected to terribly much. Maybe I miss some of the over seas races, but I’ll still live a very similar lifestyle. The only problem will be that I will have a bad mark on my credit for 7 years and then I can do it all over again.
I am sure that he owes a lot more than the $4K to me. I am guessing he has a good deal of CC debt. Hell I had to pay off a $350 water bill that he left me with at my building so i could get the next person hooked up. So i bet he owes other utilities, and probably a good deal of personal debt, i know for a fact he owes his boss money.
As far as contacting him I cannot do that, or i will find my self in a good deal of federal trouble as has been pointed out. I have offered him deal after deal after deal even before i took him to court in the first place. basically this guy is a low life lazy, drunk driving, drug taking (from three different sources) scum bag who drags down the rest of society.
And thanks to the P3carbon comment, I’ll take one myself.
that sums it perfectly. you should get a couple cash advances on the credit cards and stick it in your pocket for 90 days and you will be able to keep that too.
i am not an atty, but i mediate case of financial distress. You are indeed screwed. You should not waste money on an atty, but you should go to the creditors meeting and ask questions. Did he write any checks to his brother (preferred payments) or does he have a paypal acct, which is always overlooked by bk courts.
after the bk has been discharged you can try to get him to reaffirm the debt, but you need it on paper or recorded.
bottom line- you should move on and try don’t let it make you crazy
That’s actually the principal crux of the new bankruptcy reform law that Bush signed a week or so ago. It’s targeted at people who make an above average income by requiring them to make payments if possible rather than completely discharge the debt, but sounds like this guy filed before the new law kicked in and wouldn’t qualify under the income guidelines anyway.
The lesson here is anything you are owed above the security deposit you hold is at risk. Next time be sure to get a bigger deposit and don’t let the tab run up to $4k before you evict. Sorry about the loss.
I actually had a $1455 deposit from this shmuck. The problem is really two fold, my good will and our wonderfully slow acting court system. I let him go for about 1.5 months before starting the eviction process. His 14 year old daughter who lived with him had just had a baby (yup 14 years old) and i didn’t want to kick them out to the street. By the time it became clear I wasn’t going to get any money out of him I started the eviction process which took 45 days to get the court date, so now I am at three months, then an additional month after the hearing for him to get out! The $4000 is after the security deposit. The total before application of the deposit was about $5500, 4 months at $1,000/month plus about $1500 in damages, late fees, court fees and interest.
I am sure glad the courts and the laws are here to protect the good citizens of the US, especially the honest hard working ones. Thank God for W and the new laws, even though it doesn’t help me, at least the next guy may be saved.
