What Litigators Need To Know About Bankruptcy

  Civil litigation often decides who owes what to whom.  Bankruptcy law may control what happens thereafter to those who owe.  And to those to whom money is owed. So it behooves litigators to have a good grasp on how bankruptcy works. If you’re defendant’s counsel, you want to assess your client’s options should the case go badly. If you’re plaintiff’s counsel, you need to understand what a bankruptcy filing does to your client’s claim. Start with the stay The automatic stay is the most well known feature in US bankruptcy.  An injunction issues, automatically, on the filing of a bankruptcy case.  It enjoins the filing or continuation of actions to collect a debt from the debtor or the debtor’s property. The stay applies regardless of notice to affected parties.  However, damages for violation of the stay are only available if the actions challenged were knowing and  willful. Actions taken in…

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