Deadline Calculator FAQs

Can You Sue Someone Who Has Filed for Bankruptcy?

Yes. Creditors can recover payments that were owed to them on the date of the bankruptcy by filing a proof of claim form. However, you may not be able to recover everything. 

What Are Preference Payments?

Any payments made within the 90-days before the bankruptcy filing are considered “preference payments.” Creditors who were paid within this window may be forced to give up a portion of their payment. This portion is to be shared equally among all creditors who generally get a small percentage of the amount they are owed, if anything. Surprisingly, this means that debtors can actually sue their creditors. The creditor provided a service for which they were paid, a normal business transaction, and now they may be forced to return some or all said payment.

What Is a Summons?

A summons is an official notice of a lawsuit. It “summons” the recipient to respond to the lawsuit or appear in court. The defendant then has a certain amount of time to respond.

What Is a Response?

This is the defendant’s answer to a summons. It can take many forms. Sometimes it acknowledges receipt of the summons and declares the defendant’s intention to appear in court. Often it will be a challenge, leading to negotiations between legal representatives.

What Is a Default Judgement?

If a defendant does not respond to a summons, the court rules against them by default. This is common in a bankruptcy case. The defendant may not be able to hire a lawyer, or they could be too busy managing their affairs to respond. Defendants may, however, seek representation and challenge a default judgement.

As a Creditor, Can I Be Paid Attorneys’ Fees in a Bankruptcy Lawsuit?

Possibly, but it depends on the details of your case. Your debtor may have already signed an agreement stating they are responsible for your fees in litigation. Statues also exist that expressly grant lawyers’ fees in a lawsuit. For example, there are cases where an employer may recover fees from an employee. Depending on your relationship and prior agreements with the debtor, you may be entitled to attorneys’ fees.

Who Has the Burden of Proof?

Surprisingly, this question has more than one answer. The burden of proof can fall on either the accuser or the accused, depending on the situation.

The debtor suing you for avoidance and recovery must prove the payments were preferential or fraudulent transfers. In its current version, the bankruptcy code virtually presumes any payment made within the 90-day pre-petition period is a preference payment. 

If you are being sued for preference payments, you must provide an “affirmative defense.” Normally in court, it is up to the accuser to prove their claims. In an affirmative defense, that responsibility falls on the defendant. When you can provide evidence that negates liability, the case can be dismissed. Using a proof of claim, you must show the court a preponderance of evidence that proves your debtor was delinquent in their payments. This should be easy to do since you have access to all your legally binding documents. Also, you must show the court proof that a statutory exception protects the money you received from the debtor during the 90-day preference period. 

Is the Defendant Innocent Until Proven Guilty?

This question does not apply to civil court. “Innocent until proven guilty” is a criminal matter. Ostensibly, someone accused of a crime is innocent in the eyes of the law. It is up to a prosecutor to prove, beyond a reasonable doubt, that this person is guilty of their alleged crime. This “presumption of innocence” is not a civil matter. In civil court, you are seeking financial compensation, and you need to prove your case only with a “preponderance of evidence.” This means the court must be 51% or more certain that your claims are true. 

In a bankruptcy case, when the issue concerns a proof of claim or a fraudulent conveyance, it can be easy to demonstrate an agreement’s details and the defendant’s lack of payment. You can also prove receipt of reasonably equivalent value for payments made, respectively. However, when the issue concerns a preference allegation, the bankruptcy code essentially presumes that the defendant creditor is guilty. The burden is then on the defendant creditor to prove that they do not have to return the money paid to them during the 90-day, pre-petition period.

How Long Does Litigation Last?

There is no direct answer to this question. Each step in the process could be quick or lengthy. 

• The first step is pleading, where the plaintiff files the complaint, and the defendant responds after being served with the summons and complaint. At this stage, the parties often engage in informal negotiations where they attempt to settle, avoiding court. 
• When the case must go forward, pre-trial begins, and the case enters discovery. In this process, each legal team investigates and builds their case, collecting documents, interviewing witnesses, and so forth. Sometimes, discovery is “stayed” or paused until after mediation, which can be voluntary or mandatory depending on the state in which the bankruptcy petition was filed. Once discovery is finished, one or both parties may file a motion for summary judgement. This motion asks the court to make an immediate decision based on the information gathered during discovery rather than going to trial. 
• If denied, the matter finally goes to trial. Depending on the complexity of the case, trial can take a considerable amount of time. 
• When the trial is over, post-judgement begins. This is where either side may appeal. 
• If an appeal is approved, another trial must take place in a higher court.

The calculator is meant to help you estimate a timeframe for any deadline in a bankruptcy lawsuit. It is not intended to be interpreted as legal advice, and its accuracy cannot be guaranteed.