Legal Question in Bankruptcy in Massachusetts

Civil suit discharge in Chapter 13

If the claim in the civil suit was scheduled as an unsecured claim and if the plaintiff(s) in the civil suit were notified of the filing of the Chapter 13 and did not file a claim, and if the Plaintiffs in the civil suit did not obtain relief from the bankruptcy stay to pursue the civil action, then the claim stated in the civil suit will be discharged with a Chapter 13 discharge.

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Civil suit in Ch. 13

In Chapter 13 (or any bankruptcy), a civil suit for money damages is first stayed upon filing and then the claim is discharged (which results in the end of the suit). There are some exceptions, such as suits for alimony orsupport. Non-monetary (injunctive) mattersmay or may not be stayed or discharged.

The Plaintiff in the suit must be scheduledin the bankruptcy. If the Plaintiff files a proof of claim, you or the trustee can objectto it, and then the claim at issue in the suitwill be determined by the bankruptcy court.However, the Plaintiff will only recover whatthe plan provides for its class of claims. Soif the suit is for $10,000 and the court upholds that amount, and your plan provides for 10% payments to unsecured creditors (if that's the right class), the Plaintiff wouldonly get $1000 on its claim.

The details of what claims may or may not be subject to the stay and may or may not bedischargeable require a detailed analysis of your situation. You should consult a competentbankruptcy lawyer in your area. DO NOT TRY TOFILE BANKRUPTCY ON YOUR OWN. And don't wait for the suit to result in a judgment, as thatcan have serious adverse consequences under some circumstances, even if you intend to filefor bankruptcy (and could prevent a Ch. 13 from being viable).