July 23, 2018

Debts that Arise from Personal Disputes are Often Trouble in Bankruptcy Court

bankruptcy litigationWhen I meet with a new client, I am always on alert for certain types of debts that I know will be trouble.  Sometime the trouble factor is so great that I advise my client not to file.

One area that almost always results in expensive, drawn out bankruptcy litigation are cases where a potential bankruptcy debtor has been sued by another person over a debt and the underlying issues are personal and not just about money.

Broken business partnerships where one or both parties feel betrayed and use the courts to beat up on one another are always trouble.  I remember one such case in which I represented the party who had run out of money after several years of litigation and had turned to bankruptcy in what turned out to be a futile attempt to make the entire situation go away.  The former partner, who was objecting to just about everything in my client’s case turned to me at one point and said “I don’t care how much this costs, I just want to see your client and his family homeless.”

Not a good situation if you are the party in bankruptcy who will be writing checks to a bankruptcy lawyer to litigate endlessly in bankruptcy court.

I saw a writeup of another such case on the Clerk of Court’s website.  This case involved a dispute between two neighbors who did not like each other much.   After engaging in a verbal dispute one neighbor went to the police and accused the other neighbor of a variety of crimes.  The police arrested neighbor #2 based on these accusations and neighbor #2 spent 2 weeks in jail before her case was eventually dismissed for lack of probable cause.

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