Q: In Ch7 Bankruptcy can a Creditor demand access to / claim my old unsold screenplays as an IP/asset to satisfy the debt?

A: When you file a chapter 7 bankruptcy, you are required to list all of your assets (including the screenplays that probably have no value) and list a market value, as well as all creditor claims (including pending litigation). Once you file, the litigation will be stayed and a chapter 7 trustee will be appointed. He or she will become the owner of all of your non-exempt assets (if your IP assets have no market value, they should still be listed as exempt assets). It's up to the trustee to determine whether these assets have any value to the bankruptcy estate and its creditors. If you can show that you've tried to sell your screenplays and have been unable to, the trustee will likely allow you to keep them free of any creditors claims. HOWEVER, if this person is bent on pursuing you, he or she will likely show up at hour 341(a) meeting with the trustt and try to convince the trustee to pursue the perceived value of your screenplays. In order to pursue the litigation against you, notwithstanding the bankruptcy, they will need to ask the Bankruptcy Court to lift the automatic stay. If that happens, I highly recommend that you consult an attorney with Bankruptcy Court experience. Most attorneys offer a free initial consultation. Good luck.

A: Would you like to get the last laugh?

For my answer, I will assume that you have no tangible assets such as real estate. If so, you are entitled to exempt roughly $30,000 of assets, plus something for clothing, furniture, etc. That $30,000 can be applied to your IP. I also assume that she has not perfected a judgment lien on the IP.

So, you first need to see an experienced BK lawyer for advice about your exemptions and other issues. If your protagonist wants to take your intellectual property, then she will have to buy it from the bankruptcy trustee. She doesn't get it for free. The cost will be expensive. It sounds like she doesn't know that yet. But she must spend real money to get your IP. When she finds that out, she might slither away and get out of your life.

If the trustee abandons the IP for lack of a buyer, then you get to keep it and still enjoy the benefit of the BK!

A trustee probably will not sell for less than $50K, and very possibly, even more, knowing that you will probably need to be paid your $30K exemption, plus the trustee needs to mark up the sale by at least another $20k to cover costs of BK administration, and to have some money to pay a dividend to creditors.

Will she shell out $50K or more just to try and make you miserable? (Plus, she will also spend a bunch more money on lawyer fees to handle it for her.)

If I was in your shoes, I'd probably tell her that I couldn't care less what she does.

The way I see it, all the stuff you've written isn't doing you any good, hasn't done you any good, and will never do you any good. And you would probably love to get that $30K in cash!

Would you take $30K cash right now for your intellectual property? If so, you probably don't need to worry. Besides, I think you are still entitled to authorship recognition which may help you sell future projects that you develop after the BK.

She will either pay all the money that it takes, or else she will chicken out. Either way, I think you will get the last laugh!

A: In Chapter 7 bankruptcy, a creditor may have the right to access and claim your old unsold screenplays as intellectual property (IP) or assets to satisfy the debt, depending on the specific circumstances and applicable laws. Bankruptcy law includes provisions that allow creditors to pursue and liquidate assets of the debtor to repay outstanding debts. Intellectual property, including screenplays, can be considered an asset that may be subject to this process. It is important to note that bankruptcy laws and asset exemptions can vary by jurisdiction, and consulting with a bankruptcy attorney would provide you with specific guidance tailored to your situation. They can assess the details of your case, including the value and status of your screenplays, and advise you on the potential implications within the context of bankruptcy law. - James L. Arrasmith, Owner and Chief Legal Counsel of The Law Offices of James L. Arrasmith.