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Using Bankruptcy in Probate

I spoke to a bankruptcy attorney recently who told me that a bankruptcy could be filed in a probate to stall the foreclosure sale of a home. I should clarify he was a bankruptcy and many other areas of law kind of guy; not a specialist.  I suggested he dig deeper as I had heard multiple times it could not be done in a probate. He emailed back the next day to say I was right. I love being right but am sorry that won’t work as I want my clients to have all options possible to them. Saving mom’s house can be important and if bankruptcy would work then it should be. However, are there other options!?

I recently spoke to a bankruptcy expert from Lakewood, California which is near Long Beach and Los Angeles.  Christine Wilton told me, “I think this whole using bankruptcy to stop other court actions can either be good faith or bad faith.  All debtors that file bankruptcy must do so in good faith.  Simply filing bankruptcy to forestall another court proceeding with no good faith to effectively deal with debt obligations is NOT good faith.  It could rise to the level of malpractice to use bankruptcy solely to frustrate a probate proceeding and/or simply to stop a foreclosure sale.”  Ms. Wilton has a lot of great blog posts on her blog, the Los Angeles Bankruptcy Law Monitor, including this one on using bankruptcy in civil litigation matters.

If you are thinking about filing a bankruptcy within a probate consider what other options might be available.  Possibly filing for an injunction to stop the sale would work!? Possibly merely sending a copy of the probate court documents, letters and order, would work!? The key is to work with an experienced probate attorney AND an experienced bankruptcy attorney.

If we can help please let us know. -John