How can I get money owed to me from person filing chapter 7 bankruptcy?

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How can I get money owed to me from person filing chapter 7 bankruptcy?

Debt owed to me around $4,000. I have default judgement with interest since debtor “ignored” certified letters etc. Can I put a lien on any of his things? If so, what do I file. I know he owns a car and a few other misc hunting items. When I attend the creditors meeting: can I ask for things to be sold to settle the debt? Any “threats” or “tactics” I can use? Could his wages at current job be garnished or future garnishment to take place so I can be paid back? He seemed to fall off the radar and avoided any and all contact from me.

Asked on March 14, 2011 under Bankruptcy Law, Iowa

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

Unfortunately, you may be out of luck. Bankruptcy is designed to discharge a debtor's debts; once someone files bankruptcy, existing creditors, including judgment creditors, may no longer take collections actions and cannot lien property, garnish wages, etc. Instead, as an unsecured creditor, you will get your pro rate (basically proportionate) share of whatever moneys are generated from the debtor's assets, AFTER high-priority claims (e.g. expenses of the bankruptcy; alimony and child support; student loans; taxes) are paid; and also AFTER any secured creditors foreclose or repossess any assets which they have recourse to (e.g. after a bank forecloses on his house, if he doesn't pay his mortgage; or an auto financing company repossess a car, if he doesn't pay). In short, you are at the end of the list to be paid as a regular unsecured creditor, so there may be nothing left by the time it gets to you. As stated, however, you are not allowed to take collections actions against someone in bankruptcy if you were a creditor at the time of filing, and if you try to do so--e.g. if you threaten him--you may face legal liability yourself. Regretably, when someone files bankruptcy, unsecured judgment creditors often--legally--end up with little or nothing.


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