Let's say someone wronged you in some way, whether it was an auto accident where you were injured or sustained damage to your car, or they started a false rumor about you that got you fired from your job, or some other nasty thing.

Then one of two things happen: 1) You decide not to pursue it, either because you got over being angry or are just not a litigious person. For whatever reason, you walk away; or 2) You bring suit and are in active litigation.

But now you are in financial trouble with high credit card debt, medical bills, and the like, and you want to file bankruptcy. You probably don't tell your lawyer about what happened because you've let it go or because you are afraid that the trustee will swoop in and take all of the money from the lawsuit. As a result, it is not listed in your bankruptcy petition as an asset. This is a bad idea, and here's why!

Aside from the fact that you must disclose in your bankruptcy petition all potential claims against third parties or face the possibility of losing your discharge for hiding an asset, you could lose the lawsuit after your bankruptcy case is over. Why?

Because the defendant in your lawsuit can claim that you do not have a claim because, if you did, you would have listed it in your bankruptcy petition. That defendant could then seek to dismiss your suit on the legal principle of judicial estoppel. Find out more about judicial estoppel.

So What Do I Do?

If you have more questions about bankruptcy, then download my free book,Top Questions People Ask About Filing Bankruptcy in New Jersey.

If you live in the South Jersey area, feel free to call me at 856-432-4113 or contact me through this site to schedule an appointment to discuss your case.

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Steven J. Richardson
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Bankruptcy, Collections, Student Loan, DUI and Traffic Court attorney in Woodbury, NJ.