April 18th, 2008 by Questions
My health is the main reason for my money problems. I currently have a lawsuit being handled by a law firm. It is by no means a sure thing and may take years to settle. Even though I no longer have equity left in my house or assets, I would like to do a proposal. I fear that if the creditors learned of the lawsuit, they will let me go bankrupt and drag it out as long as they can on the chance I won my lawsuit. Your thoughts?
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April 18, 2008 at 9:21 am, Barton Goth GCO Bankruptcy Trustees said:
Firstly if you do a proposal or a bankruptcy you will be required by law to disclose this lawsuit to all your creditors on the Statement of Affairs, so they will be awair.
I can see how the creditors may be concerned if there is a potential windfall that they wouldn’t share in with a proposal. However, to overcome this you could ad a term in the proposal that stipulates if any windfall of capital comes in as a result of the lawsuit then the monies will come into the proposal in addition to your monthly payments.
I personally have never done a propsal of this nature, but there is nothing preventing it and it would clearly provide more incentive for the creditors to cooperate.
I think you are best to contact a local trustee and discuss how this can be done.