Can a creditor listed in a Chapter 7 bankruptcy, alsofile criminal charges?

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Can a creditor listed in a Chapter 7 bankruptcy, alsofile criminal charges?

Asked on September 6, 2010 under Bankruptcy Law, California

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

It depends--was a crime committed? Bear in mind that the mere failure to repay some debt or obligation is NOT, by itself, a crime--paupers prisons and the like went out a long time ago.

However, if the debtor committed fraud against the creditor, such as (for example) by--

  • Using false information to obtain a loan or financing he or she would never have been entitled to
  • Knowing passing bad checks to "repay" the debt
  • Having taken out the debt with no intention of ever repaying it

--then the creditor may be able to report the debtor to the police and file charges. The key is whether the debtor committed a criminal act, no whether or not he or she did not repay the debt or filed bankruptcy (which is something debtors have a legal right to do).


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