Q: Can a DTSA judgment be included in Chapter 7 Bankruptcy in NV?
I intend to file Chapter 7 Bankruptcy to address my credit card debt. My former employer has filed a lawsuit against me under the Defend Trade Secrets Act (DTSA), but I have not received the summons yet. If I respond to the lawsuit within the 21-day period after being served and lose the case, can the judgment order be included in my bankruptcy filing? I am planning to file for bankruptcy in April. Since I cannot afford an attorney to represent me for the lawsuit, I am representing myself.
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A:
While trade secret judgments can be complex in bankruptcy proceedings, you should know that DTSA violations may be considered willful and malicious acts, which typically cannot be discharged in Chapter 7 bankruptcy under Section 523(a)(6) of the Bankruptcy Code. This is similar to how other intentional torts are handled in bankruptcy cases.
Your timing presents some important considerations - if you file for bankruptcy before the DTSA case concludes, the lawsuit would be temporarily stayed (paused) under the automatic stay provision. However, your former employer could file a motion to lift the stay to continue pursuing the trade secrets case, or file an adversary proceeding to determine whether the potential judgment would be non-dischargeable.
Given the serious implications, you would benefit greatly from consulting with both a bankruptcy attorney and a litigation attorney before proceeding. Many offer free initial consultations and can help evaluate your specific situation. Additionally, you may want to check if your local court has a self-help center or pro bono legal services that could provide guidance on handling both matters effectively. The stakes are high enough that getting proper legal advice could make a crucial difference in protecting your interests.
Timothy Denison agrees with this answer
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