Reason 487 To Hire A Lawyer For Your Bankruptcy Case: Judicial Estoppel

21 Jun Reason 487 To Hire A Lawyer For Your Bankruptcy Case: Judicial Estoppel

Let’s say someone does a bad thing to you, and you think you’d like to sue them. Maybe you have a case, maybe not. It doesn’t matter right now.

Anyway, you cool off a bit and decide it’s a better idea to just let it go. Let bygones be bygones and all that.

But then your debt situation gets out of hand, and you decide to file for bankruptcy. Rather than hire a lawyer, you go with a paralegal or a document preparation service. The service charges you $299 or some absurdly low amount, and you figure it’s better than shelling out $1,500 or more for an attorney.

Your Chapter 7 bankruptcy case is filed, the meeting of creditors goes swimmingly well, and you get a discharge. Clean slate, and all for a lot less than a lawyer would have charged.

One day you’re talking with someone about that other person you had been thinking about suing, and they tell you that it’s a bad idea to let it go. You get all fired up, talk with a lawyer and find out you’ve definitely got something with this lawsuit.

You file suit against the bad person, and promptly get kicked out of court.

What happened?

Judicial estoppel happened, that’s what.

What Is Judicial Estoppel?

Judicial estoppel means that (1) you previously took a certain position; (2) the position was taken in judicial or quasi-judicial administrative proceedings; (3) you were successful in asserting the first position (i.e., the tribunal adopted the position or accepted it as true); (4) the former position and a new, second, one are totally inconsistent; and (5) the first position was not taken as a result of ignorance, fraud, or mistake.

In other words: you said something in court, the judge believed it, and now you want to say the opposite and expect someone to believe it as well.

Potential Causes Of Action And Disclosure Rules

When you file for bankruptcy, you’re required to disclose all of your assets and debts. Included in your assets is (are? I never know the proper grammar in this situation) any cause of action you may have against anyone, for any reason.

By making a statement that you do not have any causes of action, you are taking a position. Any attempt to bring such a cause of action after your bankruptcy case is completed is considered judicial estoppel – and will be disallowed.

Why A Bankruptcy Lawyer Won’t Let This Happen

Most of what a good bankruptcy lawyer does is analyze your situation and suss out the issues – all of them. Proper inquiry will help uncover those hidden issues, even those you hadn’t thought of on your own.

You’re smart, but not someone with a depth of real-world knowledge in this field. A paralegal or document service may know how to fill out the forms involved in a bankruptcy case, but there’s a real difference between someone who can fill out forms and one who has seen the inside of a courthouse and represented people with bill problems.

If you’ve got a good lawyer working with you, he or she will cover all the bases. And when it’s your financial future on the line, isn’t it worth it?

Related Posts Plugin for WordPress, Blogger...
The following two tabs change content below.
Jay S. Fleischman is a bankruptcy lawyer with offices in Los Angeles and New York. He can often be found on Google+ and Twitter, where he shares information about consumer protection issues and personal finance.
No Comments

Sorry, the comment form is closed at this time.