Debt to a Family Member
We filed for bankruptcy in 2006; and have subsequently been discharged. We have owed money to a family member since before this date. This particular person is now threatening legal action to recuperate some money. Did our Bankruptcy cover moneys owed to family members, even if they were not declared in our bankruptcy? Thank you.
Posted from: British Columbia
From a legal standpoint, if the debt to the family member existed prior to your assignment in bankruptcy in 2006 then the debt was discharged with your bankruptcy. That means you cannot be compelled to repay the debt – if you are taken to Court simply take along your bankruptcy documents and that should put an end to it.
Now, if you didn’t list the family member’s debt when you filed for bankruptcy (put them on the list of creditors that you swore was complete) things may be more complicated. If the family member wasn’t notified of the bankrutpcy then they may be entitled to some partial repayment now – the partial amount will be the same rate that your other debts were repaid. The Court might also decide to penalize you for failing to disclose the debt when you filed…
I think you should call the trustee that handled your file about this.