Personal Bankruptcy Former friend wants to declare bankruptcy and dump my loan

[davesam]

I have a neighbor who I thought was a long time friend. I guess desperate times bring people to do desperate things. He asked me for a $10,000 loan and I gave it to him since I knew him for 10 years and where he lives. I know his family too. He's helped us in the past, we did things together, not a total stranger. I didn't know that he and his wife live on credit. Now he informs me that he is sad to say that they are declaring bankruptcy but they are keeping their big house and car because the bankruptcy code allows them to discharge all their debts, start again but keep their big expensive place. I heard that he got some loans that he paid back from some people in town who I think he thinks are important. Don't know how recent. Is there anything I can do? I cant believe that you can keep your big expensive house and tell people that you're not paying them and don't have to. Not fair and doesnt make sense this is the law.

 

[Betty3]

It sounds like this is probably a Chapter 7 bankruptcy. You can put in a claim as a creditor with the bankruptcy trustee but that is about it. You may or may not get any of your money back. There might not be any/many non-exempt assets to pay creditors with.