Filing For Chapter 11 After Being Found Liable For Defamation
Although Sandy Hook is historically the second deadliest school shooting in United States history, some people took this tragedy as an opportunity to create conspiracy theories. According to two judges in Connecticut and Texas, Alex Jones of Infowars fame is one of them. He was found liable for defamation after the parents of Sandy Hook victims sued him for claiming the shooting was a hoax. While the amount he will need to pay is yet to be determined, Jones declared Chapter 11 bankruptcy. This typically pauses any legal proceedings against the bankruptcy petitioner. However, the bankruptcy judge returned the Texas case to Austin so that the bankruptcy would not delay proceedings. The trustee in the bankruptcy case is also seeking to have it dismissed.
What Is Chapter 11 Bankruptcy?
You could know a lot about consumer bankruptcy without knowing almost anything about Chapter 11 bankruptcy. Chapter 7 is the most popular type of consumer bankruptcy, with Chapter 13 being used by consumers frequently as well. Chapter 11 bankruptcy is usually used by extremely wealthy individuals or companies that want to restructure but remain in business. While small business provisions are available, it is generally too complex and expensive for the average person to use.
When someone files Chapter 11 bankruptcy, their top creditors form a committee. If it is a business filing, general management will retain control over day-to-day operations. However, major decisions must get the committee’s approval before the company can proceed. Examples of such decisions include selling property and equipment, opening and closing locations, etc. The company will submit a proposal to the committee on how the debt should be restructured. If the committee agrees to it, the court will sign off on it and the plan will be put into action. Otherwise, the creditor committee can submit a counterproposal. The trustee can even submit a proposal if the two are unable to reach an agreement.
Obviously, all of this back and forth can take months, or even years, to finalize. And when someone files bankruptcy, they are protected from lawsuits and creditor collection methods. But a creditor- such as a parent in a defamation suit- can request relief from this protection so that they can proceed with their lawsuit.
The Defamation Case
All of this resulted from a school shooting in December 2012 that killed 20 first graders and 6 teachers. On his news site Infowars, Alex Jones perpetuated the theory that the shooting didn’t actually occur, and was a conspiracy by the left wing media to increase support for gun control. This resulted in victims’ family members receiving harassment and death threats from Infowars followers. They brought a lawsuit against Jones for defamation, as well as his companies Infowars (now known as InfoW LLC), Prison Planet TV, and IW Health. Jones and his company failed to submit documents during the discovery process, so the judge issued a default ruling against him. This has essentially eliminated the need for a trial on the issue, but a jury will still be responsible for determining the damages that Jones owes the plaintiffs. Since Jones filed bankruptcy, the plaintiffs have dropped his companies from the defamation claim, leaving Jones as the sole liable party.
The Bankruptcy Case
Alex Jones initially filed bankruptcy as an individual and for his businesses, including those named in the defamation suit. This technique has been used by large organizations being sued by several people at once before- examples include the Catholic Church and Boy Scouts of America, both while facing sexual abuse scandals. This case hasn’t proceeded far yet- both the trustee and parents in the defamation suits believe this is just a tactic to stall those lawsuits’ proceedings. In fact, one of the defamation case judges in Texas was forced to delay a trial set for April 25 due to the bankruptcy filing. However, Infowars, Prison Planet TV, and IW Health have all agreed to dismiss the bankruptcy because the families agreed to dismiss those companies from the defamation lawsuits. The trustee’s office is working on having the bankruptcy case dismissed entirely.
Can I Use Bankruptcy To Stop a Lawsuit From My Creditors?
There’s nothing like a summons from one of your creditors to let you know that your debt is becoming a big issue. If you don’t appear at your court date with a defense against the amount your creditor claims you owe them, they will get a judgment against you. This judgment can then be used to garnish your wages, levy your bank account, put a lien on your property, and more.
You don’t need to have the resources to file a Chapter 11 to use bankruptcy to protect yourself from creditor lawsuits. Chapter 7 and Chapter 13 both activate the automatic stay upon filing. Your creditors can’t file a lawsuit against you while the automatic stay is in place. It will also stop wage garnishments, bank levies, utility shutoffs, and more. In most cases, the automatic stay will last the entirety of your bankruptcy case. This is usually around 3-6 months for a Chapter 7, and 3-5 years for a Chapter 13. It could also end unexpectedly if your case is dismissed. Your automatic stay could be limited to 30 days if you file more than once in a year due to a dismissal, without convincing evidence that you deserve an exception to this rule. Your creditors can also file a motion for relief from the automatic stay, which would allow them to proceed with collection while you remain protected from the rest of your creditors.
If you have creditors on your back, one slip up in your bankruptcy could mean losing an asset, part of your paycheck, and more. The best way to avoid this is by hiring a bankruptcy lawyer who will fiercely defend you and your assets. Your attorney can make sure that your case is filed correctly, without costly mistakes on your petition. You can file with confidence knowing that you will have legal counsel if any issues arise with your trustee or creditors. Our bankruptcy team makes filing with experienced legal representation affordable, and it can even help your post-bankruptcy credit score.
Our team has represented enough clients to know that when you’re filing bankruptcy, money can be tight. That’s why at Henderson Bankruptcy Lawyers we offer qualified clients the option to file their bankruptcy cases with our zero dollars down payment program. If you’re eligible, you can file your bankruptcy case- and activate the protections provided by the automatic stay- for no money down. Your fees will be paid in affordable installments, for up to 12 months after filing at a 0% interest rate. Making your payments on time will even help improve your credit score, at a time when your credit history needs rebuilding the most. Don’t let a judgment or a wage garnishment burden your life- see if bankruptcy might be able to help you! Our experienced bankruptcy lawyers are standing by to discuss your financial situation. Your initial consultation is 100% free and confidential. Learn more about the bankruptcy process and get an affordable quote for bankruptcy representation. To get started, fill out our online form or call 480-833-8000 today.
Henderson Bankruptcy Attorneys
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Henderson, NV 89014
Phone: (702) 899-3328