Why You Need To Tell Your FDCPA Lawyer If You Plan On Filing Bankruptcy
Why You Need To Tell Your FDCPA Lawyer If You Plan On Filing Bankruptcy.
If you are planning on filing bankruptcy, then you need to let your lawyer know who is representing you against a debt collector in your FDCPA (Fair Debt Collection Practices Act) lawsuit.
You also need to let your bankruptcy lawyer know you have a lawsuit or a potential lawsuit against a debt collector.
In the world of bankruptcy, a lawsuit is an “asset” that may no longer belong to you
Here’s the deal — if you file bankruptcy you have to list all of your assets.
Assets include lawsuits and potential lawsuits that you have.
“OK, so what’s the big deal about not listing a lawsuit or potential lawsuit?”
You can lose it.
It may be gone forever because you told the bankruptcy court you had no lawsuits, and actually you do.
This is sometimes known as “estoppel” and the idea is you can’t tell one court one thing and then a different court something else.
The law “stops” you from this.
“Alright, fine I’ll list it — no big deal, right?”
The problem with filing bankruptcy, even if you list the lawsuit, is you may lose control over the lawsuit, or you may lose the settlement money to your creditors.
The trustee in bankruptcy often controls your assets and so the trustee can take over the lawsuit.
And the money can go to your creditors.
So if you are going to file bankruptcy, this is simply something you have to face.
Let your lawyers know what you are planning so they can give you advice to avoid bad consequences
If you will let your lawyers know what you are doing there are ways and strategies to give you the best possible result.
Sometimes you delay filing bankruptcy.
Sometimes you still file it but there is a strategy how to maximize the value of the lawsuit to you personally.
The worst decision is to not let your bankruptcy lawyer know about your FDCPA lawsuit against an abusive debt collector and to not let your consumer lawyer know about the bankruptcy.
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Thanks for reading, and hope you have a great day!