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Posted: 12/13/2001 1:10:14 PM EST
5 months ago I hired a friend of friend to build a bunch of cabinets for me. The work was going very slow. So slow I gave him a dead line and told if it was not done I was going to sue him. When I called him to see what was done he told he had filed for bankruptcy and he could not complete the job. He did complete about 1/3 of it. I called his lawyer and they confirmed he had file and I was listed as a creditor. I did pay him 4000 in advance (I know dumb move). The lawyer said he owed me $5600 and I could expect to get paid 70% over 5 years. They were going to send me the paper work to fill out. Is there anything I can due to help me cut my losses or get paid faster? He did own a lot of nice woodworking equipment I would not mind having. Can I get a lein for the equipment? Would the equipment go up for auction? Do I need to get a lawyer and throw more money after the problem? Thanks
Link Posted: 12/13/2001 1:25:23 PM EST
Depends upon the type of bankruptcy he is filing. Sounds like a business Chapter 11 for reorganization. In many cases (80%) these last long enough for the business owner to pull the assets out because the creditors don't pay attention. Then when they have finished there isn't anything left except what the lawyers get. If there is a creditors committe see about getting on it & watch his books & keep him honest.
Link Posted: 12/13/2001 6:24:52 PM EST
89Hawk, Contrary to what Grin_N_Barret said, this is almost certainly a chapter 13 individual bankruptcy. You will probably recieve written notification pretty soon that will give you more detailed information. Be careful when dealing with a debtor in bankruptcy. All collection efforts are barred by court order when a person or entity files bankruptcy. Efforts to collect after notice of bankruptcy can lead to contempt of court sanctions. Let me tell you a little about chapter 13 bankruptcies. First, the debtor files for it. The debtor proposes a plan to the court to pay all or a portion of the debt. I believe that the creditors get an opportunty to oppose confirmation of the plan. The plan must devote substantially all of a debtors disposable income to repayment of the debt. This means that he will be on a very strict budget for FIVE years. Frankly, chapter 13 is only really useful if there are certain ecumbered assets that the debtor has to keep. The VAST majority of chapter 13 bankruptcies end in failure, resulting in no discharge of the debt (this usually ultimately becomes a chapter 7 liquidation bankruptcy). As for his tools, I wouldn't count on getting them. These are likely tools of his trade, something he will need for a chater 13.
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