Cite as: Keith M. Lundin, Lundin On Chapter 13, § 32.8, at ¶ ____, LundinOnChapter13.com (last visited __________).
Occasionally a Chapter 13 debtor will have an interest in intangible property. Debtor’s counsel should ask about patent rights, copyrights, licenses, franchises, contract rights and the like.
Counsel should also ask whether the debtor has received any gifts, whether any loans are owed to the debtor and whether the debtor anticipates an inheritance.
Frequently, debtors neglect to tell counsel about pending litigation in nonbankruptcy courts or causes of action that have accrued but have not been filed. Debtors are often involved in work-related litigation as plaintiffs, and they may be plaintiffs in personal injury or malpractice actions. It is not infrequent that debtors are class members in some litigation, for example, lender or product litigation. The risks of not scheduling causes of action and pending litigation are huge: nondisclosure may present good-faith problems at confirmation,1 and the debtor may be barred by application of judicial estoppel from pursuing the nonbankruptcy litigation.2 Extra effort is necessary to ensure that the debtor tells counsel about any existing or potential causes of action.
1 See §§ 179.2 [ Accuracy of Petition, Schedules, Statement and Testimony ] § 104.3 Accuracy of Petition, Schedules, Statement and Testimony, 180.1 [ Prepetition Conduct and Misconduct—In General ] § 105.1 Prepetition Conduct and Misconduct—In General and 182.1 [ Filing on the Eve of Whatever ] § 105.3 Filing on the Eve of Whatever.
2 See § 47.7 [ Causes of Action ] § 46.11 Causes of Action—Including Judicial Estoppel Issues.