Should I File Bankruptcy?

Although I am qualified to practice in bankruptcy court, I do not consider myself to be a competent qualified bankruptcy lawyer. On bankruptcy questions, you absolutely need to consult with a bankruptcy lawyer who only does bankruptcy.
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The filing of a bankruptcy petition starts an administrative process that includes some elements of litigation, including discovery. In my opinion, you should take maximum advantage of your opportunities to use discovery in the administrative part of the bankruptcy action.
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At some point, you may wish to file an adversary proceeding in bankruptcy court. The bankruptcy judge has restricted jurisdiction to consider issues that are relevant to the size and distribution of the bankruptcy estate. This overlaps with your request for a “court complaint.” You basically have three choices of venue in which to file your lawsuit, although it is possible to break it up.
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  1. After sending the CFPB complaint you can file a separate FDCPA complaint in federal court or even state court. This strategy is intended to keep matters separate and simple. It has several strategic advantages but a few tactical challenges. If combined with other strategies you may be accused of vexatious litigation.
  2. A general complaint for injunctive, supplemental, and declaratory relief could be filed in either federal court or state court. My general predisposition is to file it in federal court and then treat it as your adversary proceeding in bankruptcy court. If you do that, you will only be in two venues.
  3. A complaint filed in the bankruptcy court is called an adversary complaint. It would attack the basis for any claim or proof of claim that is referenced in the bankruptcy. Special care must be taken to ensure that the schedules don’t admit what you are claiming is false. If the decision is made to be in three venues, the adversary complaint could single out specific issues that are most likely to be within the restrictive confidential jurisdiction of the bankruptcy judge I had to leave out the allegations contained in the general complaint filed in a court of competent general jurisdiction (federal or state).
The people who can afford to be in three venues frequently had good results. But it is very expensive since you would need separate counsel litigating and bankruptcy court and whichever court of general jurisdiction you have filed your general complaint. If you are going to bankruptcy court and you are expecting litigation you either need a bankruptcy lawyer who is a litigator, which is rare, or you need a bankruptcy lawyer and a litigator.
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Subject to the opinion of local bankruptcy counsel, I generally favor the filing of chapter 13 or chapter 11 bankruptcy. Individuals who attempt to file Chapter 11 petitions are subject to vigorous restrictions. What I don’t like about chapter 7 is that, unlike the other chapters, the debtor is giving up ownership and control over all assets and all liabilities to a US trustee in bankruptcy, including claims. Generally speaking, the timing of the filing of a petition for bankruptcy relief usually coincides with a deadline date for some other legal event.
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Neil F Garfield, MBA, JD, 74, is a Florida licensed trial and appellate attorney since 1977. He has received multiple academic and achievement awards in business, accounting and law. He is a former investment banker, securities broker, securities analyst, and financial analyst.
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