by | Dec 23, 2022 | Bankruptcy Law, Chapter 11 |

Section 108 of the bankruptcy code is entitled Extension of Time. This section can provide someone with additional time to bring a claim against a company that has filed bankruptcy. For example, lets say you slipped and fell in a department store because they were negligent. And let’s assume the statute of limitations for this claim is 2 years. What that means is if you do not file a lawsuit relating to those injuries until more than 2 years have passed, then the statute of limitations prevents you from suing at all. Now lets say that you have been treating for injuries and wait until 22 months have passed to file the lawsuit. And before the lawsuit is filed, the department store files a Chapter 11 bankruptcy. In order to now file the lawsuit, you must now first file a motion for relief from the automatic stay to get permission to file the lawsuit. (When a bankruptcy is filed, creditors are automatically stayed (stopped) from filing a suit against the debtor.) Many personal injury attorneys are not familiar with the process. Perhaps the attorney does not know the bankruptcy issues and files the motion to get permission to sue too late and is given permission after 2 years have already passed. Are you now prevented from suing. If there is no bankruptcy, then the answer most times would be yes. However, section 108 of the bankruptcy code states that if the statute of limitations has not expired when the bankruptcy was filed, then the time to sue does not end until the later of when it normally would have run out (2 years) OR 30 days after the automatic stay ends. So in this example, you could still proceed with the lawsuit as long as you file within 30 days of getting the permission tp proceed. https://www.bravermanlaw.com/bankruptcy-law/


FindLaw Network