Legal Question in Bankruptcy in Minnesota

If a person has a judgement against them from a civil lawsuit where that person was found guilty of stealing customers and converting customers, and that person files for bankruptcy, is the judgement exempt from bankruptcy because the things they were found guilty of is fraud? In other words, would that person still be responsible for paying the judgement because it was a judgement against him for fraud? There were no punitive damages included in the judgement. This occurred in Minnesota.

Asked on 2/13/12, 10:51 am

1 Answer from Attorneys

David Kelly-952-544-6356 Kelly Law Office

I am sorry to have to tell you that "fraud" is one of the exceptions to discharge. The creditor would probably have to bring an adversary proceeding in your bankruptcy case to object to the discharge. An adversary proceeding is like a separate lawsuit in the bankruptcy court. Unless I can settle the case right away, I always refer those cases to another attorney who specializes in defending those.

If you already have a finding by a state court that fraud was involved, that finding could be conclusive in the bankruptcy case as well. They call that Res Judicata - a thing decided.

You should probably start by consulting with an attorney who defends adversary cases. That's what you should be looking for.

This response is for general information purposes only and does not create an attorney-client relationship.

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Answered on 2/13/12, 11:44 am

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