Legal Question in Bankruptcy in Pennsylvania

Re: Claiming bankruptcy after being sued

Your question is a little ambiguous as to whether NJ or PA contract law would apply. I will try to answer independently of this. The applicable bankruptcy law would be the same.

First, the bankruptcy would put any suits or collection proceedings on hold until the bankruptcy judge orders otherwise. This is known as the "automatic stay." For the moment, you have to stop any collection attempts. However, you should verify that there actually is a bankruptcy that has been filed and you should ensure that your claim has been listed. That may be the most that you can do for the moment and there is the possibility that you and the other students will lose the money. However, there are two other possibilities. First, if the bankruptcy judge determines that the debt arises from certain types of fraud, it might not be discharged in the bankruptcy. Secondly, you should contact the attorney general of the State in which the "school" operated to see if there has been a violation of any State law. If the State were to pursue a criminal action and restitution were to be awarded as part of the sentence following conviction, that debt falls under a differenct category and may be exempt from the bankruptcy.

If the amount that you are owed makes it worthwhile, it would be good for you to have an experienced business lawyer look over what you have. If I can be of any help, please call or email.

See also: http://info.corbettlaw.net/lawguru.htm