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NSW Creditor Goes Bankrupt - What Happens to Debt?

Discussion in 'Debt and Bankruptcy Law Forum' started by TebetMonkey, 3 December 2015.

  1. TebetMonkey

    TebetMonkey Member

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    I would like to pose a scenario.

    Let's say J owes T money. T goes through a legal process and eventually bankrupts J for $10,000 owing. T then himself goes bankrupt. J is a bit tardy and his trustee has his bankruptcy extended by 5 years through an objection. T exits bankruptcy after 3 years and 1 day. J has made no contributions or entered into any agreement during T's bankruptcy.

    Does J still owe T $10,000 or his estate $10,000 after T is discharged? Does a debt to a creditor survive a creditors bankruptcy once the creditor has been discharged?
     
  2. Sophea

    Sophea Well-Known Member

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  3. TebetMonkey

    TebetMonkey Member

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    Hi Sophea,

    Thank you for your response. My question was J is still not discharged. T as the petitioning creditor has now gone bankrupt and has also been discharged. Does the bankruptcy of T and her discharge remove T as a creditor of J? J would like to make an offer of composition and she wants to know if she should include T in the creditor list.
     
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