Can a business add a small claims judgement to an existing bankruptcy? Bankruptcy was filed in Sept. '11. A small claims judgement was enter...

Question

Can a business add a small claims judgement to an existing bankruptcy?

Bankruptcy was filed in Sept. '11. A small claims judgement was entered in Nov. '11

Answer

The small claims judgment truly should be vacated because the court was stayed from adjudicating the claim, and the small claims plaintiff violated the bankruptcy's automatic stay. Since I assume that the cause of action sued upon (the debt) arose before the bankruptcy was filed, it is a prepetition debt that would be discharged in a Chapter 7 bankruptcy, or included in the plan of bankruptcy filed under another chapter. If you included the underlying debt in the bankruptcy, then even the judgment should be covered. However, if you did not include it, you should amend the bankruptcy petition to include the judgment creditor and the amount. You would need to amend Schedule F and the creditor matrix.