Question: I borrowed $26,500 from a friend and didn’t pay them back and they sued me. Since it was in small claims they were only awarded $25,000.
Now if I file for bankruptcy would this $25,000 go away too? Would legal settlements still stick with me if I file personal bankruptcy? Thank you
Debts Discharged In A Bankruptcy
Bankruptcy deals with your unsecured debts. There are exceptions to the debts that are included in a bankruptcy, in particular certain student loans, alimony & child support, fines and penalties imposed by a court and debts that arise due to fraud. In your situation, unless fraud was involved, this debt would be discharged if you went bankrupt.
If you have questions about whether or not your debts would be included in a bankruptcy or consumer proposal, our expert trustees in bankruptcy can provide you with more information.