Page 189 - Judgment Enforce Course

Judgment Enforcement – The Step-by-Step Course

In a Chapter 13 bankruptcy, the debtor is permitted to design a plan to pay a

percentage of what he owes, usually only to “secured” creditors—creditors with liens.
In this case, the debtor doesn’t give up assets, but he must fulfill the payment plan to the
letter. The balance of the debts are then discharged.

There is also Chapter 11 which is usually for companies in financial trouble. It allows

them to continue operating while they restructure their debts. (There is also a Chapter 12,
which you don’t have to worry about unless your debtor is a family farmer.)

TWO KEY TERMS YOU MUST KNOW:

Discharged: The bankruptcy went through, and
the debts are unenforceable (effectively
eliminated)

Dismissed: The bankruptcy did not go through,
because the court dismissed it for one reason or
another (effectively, he got kicked out.)

Sometimes JD’s just file bankruptcy, and then drop out.

Bankruptcies are not automatic. I’ve had many debtors who began the bankruptcy

proceeding hoping I would go away, in which case they would simply drop out of
bankruptcy and go on their merry debtor way. When I didn’t go away, or when I made it
expensive for them, they still dropped out of bankruptcy, and then I was able to collect.
But not all of them dropped out. Some won despite my oppositions.

Okay, so what are my options?

Creditors such as Assignees (you and me) have rights, too. But our response must be

within the law. There are 2 things we can do:

1. You can appear at the first bankruptcy hearing (called a Rule 341 Meeting
of Creditors) and question the debtor about his assets.

2. You can file an “Adversarial Complaint” against the debtor if your
judgment includes misdeeds such as fraud, misrepresentation, or malicious

injury, or if it’s from a marital settlement. You can also file an adversarial

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