Angela Martin’s Legal Blog

This week as I was looking for a topic to blog about, I came across an interesting story.  It is a situation similar to those lawsuits people use to demonstrate how the legal system just goes wrong.  For example, there is the story where a theif breaks into someone’s home, trips on a rug, and then sues the homeowner.

 Well, sad to say, a similar situation has occured in bankruptcy court.  A St. Louis resident hired a contractor to do some work for him.  After paying over $18,000, the contractor never started any work.  Eventually, the contractor was arrested and ordered to pay restitution to the St. Louis resident.  How does this interact with bankruptcy law, you may ask?

 Well, the contractor filed Chapter 7 shortly before his arrest and filed an action in bankruptcy court alleging that the man he defrauded was in violation of the Bankruptcy Automatic Stay that prevents collection of any debt upon the filing of a bankruptcy.  The bankruptcy court actully found in favor of the contractor and ordered the individual to return any amounts he had collected through the restitution proceedings!

The matter was appealed and the final decision is still pending.  In either case, it is a rather twisted situation when Bankruptcy relief denies “justice.”