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If i didn't have bad luck, i'd have no luck at all
Dr. Frenchenstein
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Registered User regular
for background: http://forums.penny-arcade.com/showthread.php?p=15920919#post15920919
Basically, i have been in a legal battle over the shitbox house i purchased for about 2 years now. I won, judgement got reversed, we settled, he reneged, got a judgement, and now he is allegedly going bankrupt.
Also, my lawyer is a POS. There was supposed to be an oral exam (where my lawyer gets to see his finances, and we can go after his bank accounts) yesterday, and my lawyer forgot to go. However, he did see the defendant's lawyer in housing court saying the defendant was filing for bankruptcy. awesome.
I realize i am basically due the impressive sum of jack and shit if he does file, so my question now is from more of a tax perspective. I dropped about $16k for this repair back in 09. I then settled for a bit more than half that (of which i received 1/3 of that). essentially, there is a confessed judgement on the books in my favor for ~9k (not counting the interest accrued since the judgement was entered). Obviously, i wont be getting these monies, so can that be chalked up as a loss and written off on my taxes? I'm just grasping at straws and trying to salvage the most i can out of this SHITTY situation.
Basically, i have been in a legal battle over the shitbox house i purchased for about 2 years now. I won, judgement got reversed, we settled, he reneged, got a judgement, and now he is allegedly going bankrupt.
Also, my lawyer is a POS. There was supposed to be an oral exam (where my lawyer gets to see his finances, and we can go after his bank accounts) yesterday, and my lawyer forgot to go. However, he did see the defendant's lawyer in housing court saying the defendant was filing for bankruptcy. awesome.
I realize i am basically due the impressive sum of jack and shit if he does file, so my question now is from more of a tax perspective. I dropped about $16k for this repair back in 09. I then settled for a bit more than half that (of which i received 1/3 of that). essentially, there is a confessed judgement on the books in my favor for ~9k (not counting the interest accrued since the judgement was entered). Obviously, i wont be getting these monies, so can that be chalked up as a loss and written off on my taxes? I'm just grasping at straws and trying to salvage the most i can out of this SHITTY situation.
Dr. Frenchenstein on
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The answer is that you are totally off. I hesitate to call anything in the law "complex", but how a judgment debt is treated in bankruptcy is a fairly complex question. Hence my recommendation.
RE: bankruptcy - unless there's some fraud element of the judgment, the bankruptcy will wipe out your judgment. You may get some payment out of the case, may not, but don't hold your breath.
I didn't read your linked thread, but it seems to me that your claim was for damages. Not my area of expertise, but I believe that is not taxable. For example, if your house burns down and insurance rebuilds the place, you don't declare the receipt of the new house as income.
Dumbo 30 second answer - http://www.ehow.com/how_5982933_deduct-court-judgments-tax-return.html
Real answer - have your lawyer refer you to an accountant to answer your question. If your lawyer missed the hearing he feels bad and should be able to phone in the favor of some free advice.
bankruptcy wipes out the debt entirely right? so it's not a "bad debt" once he files, it's just gone. Pretty much everything i've seen, while not tailored to my specific situation, is leaning towards the resolution that i wasted a SHITLOAD of money suing this fuckhead.
A few of my friends wanted to go find this guy's house and slash his tires, bust his windows, etc. IT DIDN'T HAPPEN, NOR DO I PLAN ON DOING OR CONDONE THAT. at this point i would really like to have taken them up on the offer. Learned a home buying lesson the hard way i guess.
You can challenge the dischargeability of a debt in bankruptcy for instances where the debt was obtained through "fraud or dishonesty". There are a few others that I do not know off the top of my head, but there is a pretty high threshhold for actually proving fraud if you go that route.
Also, FYI In order to file for an adversary proceeding, you need a lawyer that is admitted to the Federal Bar.
Also, is he filing Chap 7 or Chap 13?
Hopefully my lawyer will get back to me soon once he chats with the other guys lawyer.
If your lawyer does not normally do creditor-side bankruptcy work then what he is doing right now is walking over to a law library, opening Collier on Bankruptcy, and seeing what it says. I'd really consider switching to someone more experienced in bankruptcy. What just happened to you is akin to if you started out with an ear infection, and then it turned into syphilis. What would you do then? You would switch doctors.
As to Deebaser's comment: this is assuming he notices things properly, or even schedules his debts properly. Of course, if he doesn't schedule properly, then that's good for you.
There's also no such thing as a federal bar.
And yes, I got the nomenclature wrong, but you do have to be admited practice in the appropriate federal jurisdiction. IANAL, but I know that there is a nonzero chance his attorney will have to file a pro hac vice motion to represent him in bankruptcy court.
And the only thing that doctor's and most lawyers have in common is post graduate debt.