Protecting a settlement from imediate bankruptcy

This is a discussion on Protecting a settlement from imediate bankruptcy within the Bankruptcy Law Questions forums, part of the Legal Questions & Answers Forum category; Are there ways to create a settlement that somewhat protects from bankruptcy and gives the person on the losing end of the settlement a realistic chance to meet their obligations ...

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  1. #1
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    Lightbulb Protecting a settlement from immediate bankruptcy

    Are there ways to create a settlement that somewhat protects from bankruptcy and gives the person on the losing end of the settlement a realistic chance to meet their obligations (when they are not a very reliable person)?
    For example. Instead of settling for a lump sum of $25,000 in one year and the person that is losing it immediately filing for bankruptcy, is it possible to get them to agree to have a lawyer issue them with a bill for $5,000 every year?
    In this example the question is:
    If they go bankrupt after the first $5,000, will that bankruptcy clear them of the other 4 later payments, or can it all be setup so that the remaining 4 payments are all separate "undelivered" (so bankruptcy can't touch them?) entities still attached to the person or social security# regardless of bankruptcy?

    The issue I see is that there has to be the "initial agreement" on all 5 payments. Does bancrupcy clear this agreement, even though 4 of the payments haven't been requested yet?

    Are there any other methods to achieve something similar?

    Thanks

    Last edited by Optimizer; 09-28-2012 at 01:00 AM.

  2. #2
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    Hi Optimizer, you've got an interesting question here, one that I'm going to research and give you some information about... I have something in mind that would be a way to consider approaching it, and I'll post soon about it. You pose and interesting legal question...

  3. #3
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    Thanks, I thought it might be an interesting one for the experts. Thanks for looking into it and I really look forward to the reply(ies)....!!

    I was going to add another related question here - but I think it's worthy of its own post (at least for helping other people searching for information), so I'll post it as a separate post. You're welcome to delete it or pull it over to this post if you think your answer is better suited to it all being in this one post.
    Thanks.
    Here's the other link:
    How can I protect a settlement or Court Judgment from immediate bankruptcy?
    Last edited by Optimizer; 09-29-2012 at 09:09 PM.

  4. #4
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    I very much appreciate you taking the time to study this issue - and that's what this issue needs (just as I'm taking the time to investigate it too), but unfortunately there is the opposite constraint "time", and I'm about out of time to receive an answer as deadlines often don't move for unknowns.
    So it's probably going to be a shame for me to miss the answer, but I hope it is of use to other people.

  5. #5
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    Well the 2001 Bankruptcy Change Act resolved the support property situation, by expanding the protection for the entire contract agreement. New Area 223(a)(26) enables the lender partner to prevent the release, of the residence component of the contract by processing an attacker action in the bankruptcy court.


 

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