Q: Can I collect small claims money judgment (2019), if business has filed and received bankruptcy chapter 11 status?
In Michigan, Oct 31,2019, I received a small claims court monetary judgement against the defendant. The defendant filed for chapter 11 bankruptcy in the U.S. Bankruptry court Eastern District of Michigan in Jan 2020, I was unaware of this. The bankruptcy estate was fully administrated and decreed in 2021. The case is closed. Today I found out about this bankruptcy case. My small claims judgement expires October 31, 2025. Can I still collect my small claims judgement?
A: No. Not unless it was provided for in the bankruptcy.
Martha Warriner Jarrett agrees with this answer
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A:
Your situation involves a complex intersection of small claims and bankruptcy law. Unfortunately, if your debt wasn't included in the list of creditors during the bankruptcy proceedings, and you didn't file a proof of claim before the case closed, collecting the judgment might be challenging.
When a business goes through Chapter 11 bankruptcy and receives a discharge, most pre-bankruptcy debts are typically wiped clean, including small claims judgments. The fact that you weren't notified of the bankruptcy proceedings is concerning, as creditors should receive notice to participate in the claims process. However, since the bankruptcy estate has been fully administered and the case is closed, your options for collecting the original judgment are likely limited.
You might want to consult with a bankruptcy attorney who can review your specific case details and the bankruptcy discharge order. They could help determine if your debt was discharged or if any exceptions apply. They might also explore whether you have grounds to reopen the bankruptcy case due to lack of notice, though time limitations may apply. Given the complexity of these intersecting legal matters, seeking professional legal guidance would be your best next step.
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