Debtor goes Bankrupt
during Enforcement
Q: What if my debtor goes bankrupt while
you are enforcing my judgment?
A: The Judgment Enforcer (JE) will almost certainly
let you know if the debtor files for bankruptcy.
Neither JudgmentBuy or most JEs are lawyers -
but we all know that filing
bankruptcy means no creditor or
JE can do anything without first
getting the permission of the bankruptcy court.
If the debtor is really poor -
JEs give up as nothing can be done.
If the debtor's bankruptcy attempt
is successful - it's over. (If you request, the JE will
likely return the now worthless judgment
back to you.)
If the debtor has assets - the JE will likely file a creditor's claim
(which means they may eventually collect something.)
If the debtor has
lots of assets or is a fraud (and the judgment
is big) - the JE may decide to attempt court
actions to recover money on the judgment. (This is not easy or cheap.)
JEs always consider bankruptcy when enforcing judgments.
Especially if a debtor communicates
with them - JEs do not push them into bankruptcy.
Once in a while forcing a debtor to file for bankruptcy both
makes sense and is a last resort.
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