The most common reasons a person might want to run a bankruptcy check involve determining a persons credit worthiness or financial history. The resulting bankruptcy report is often used as part of a tenant screening process and/or as part of a pre-employment screening process for certain types of jobs. Bankruptcy searches are also conducted as part of a pre-litigation process to determine if a lawsuit is worth filing or not.
Many times when an individual falls on hard times and finds themselves unable to pay their debts they may simply choose to file a bankruptcy and include the debts that may be owed to you in the filing thus making the debt noncollectable.
Bankruptcy is a legal proceeding that allows a person to eliminate all, or a portion, of their debts. The filing of a bankruptcy immediately gives them protection under the federal bankruptcy laws and prohibits creditors from taking any further collection activity against them. Once the bankruptcy is completed and a person has received a bankruptcy discharge, they are no longer obligated to pay any of the debts that were discharged in their bankruptcy filing. However, there are laws in place that prevent a person from repetitive filing.
A person cannot receive a discharge in a Chapter 7 case if they received a discharge in either (a) a chapter 7 bankruptcy filed within the last 8 years, or (b) a Chapter 13 bankruptcy filed within the last 6 years. Additionally, a person cannot obtain a discharge in a Chapter 13 case if they either (a) obtained a discharge in a Chapter 7 case filed within the past 4 years, or (b) obtained a discharge from a Chapter 13 case filed within the last 2 years.
With this in mind it might be worthwhile to know if a person has already had a bankruptcy discharged recently enough to prevent them from filing another bankruptcy including your name as a debtor. If they have had a bankruptcy discharged too recently to allow them to file again then you may proceed with your lawsuit without the fear of the other party getting out of the responsibility of paying the debts owed to you through bankruptcy court!!!