Pending Lawsuits and Money Owed to You – Must be disclosed in Bankruptcy
When you file for bankruptcy, you are clearly asked to indicate if you have any pending litigations that you have not filed prior to bankruptcy. This is also applies to all unfiled lawsuits and all potential claims.
This action may have taken place some time ago but the decision and final payout to you is still not finalized.
If someone owes you money and you were not able to collect those dollars, that also must be disclosed.
- What could happen if you don’t indicate a pending litigation in your bankrutpcy petition?
The person you sued could legally file a motion to dismiss your claim and you would get no settlement for money at all.
- What could happen if you don’t indicate money that is owed to you?
That person would not be liable to pay you the money owed.
Also, keep in mind, your creditors have a right to the money that is owed you; therefore, the Trustee would assume the role to collect what is owed to you for the bankruptcy estate.