Colton, CA asked in Contracts and Civil Litigation for California

Q: I'm currently being sued and just discovered that the plaintiffs will be filing Chapter 13. How does it affect the case?

I'm currently being sued for breach of contract and so far we are still going through the motions of the lawsuit the majority of their actions have been dismissed at this point with the exception of one cause of action but i just discovered that the one of plaintiffs will be filing for Chapter 13 bankruptcy. How does it affect the cas against me and do they have to disclose it to the court?

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2 Lawyer Answers
James L. Arrasmith
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  • Sacramento, CA
  • Licensed in California

A: When a plaintiff files for Chapter 13 bankruptcy, it can affect your case in several ways. Chapter 13 involves restructuring debt, and the plaintiff's financial affairs will be overseen by a bankruptcy court. This may lead to a stay on the lawsuit, meaning the case could be paused until the bankruptcy proceedings determine how to handle the claim.

You should be aware that the plaintiff must disclose their pending lawsuit as part of their bankruptcy filings. This ensures the bankruptcy court has a complete picture of their financial situation. If the court allows, the lawsuit might continue, but any potential recovery could become part of the plaintiff’s bankruptcy estate.

It's important to keep your own legal counsel informed about the plaintiff’s bankruptcy filing. This can help you navigate any changes and understand how the bankruptcy might impact your defense strategy and any potential settlement discussions.

Delaram Keshvarian
Delaram Keshvarian
  • Orange, CA
  • Licensed in California

A: Thank you for your question!

The plaintiff's bankruptcy filing will impact your client's post-judgment collection in case there is any counter or cross-claim. Also, it may delay litigating the breach of contract claim.

This is merely a discussion of general laws and not legal advice. For legal advice, more specific facts and investigations are needed. I recommend you consult with an attorney for more details.

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