If a debtor has a potential claim under 42 USC 1983 violation but is in Chapter 7 bankruptcy, does the trustee or the estate effectively own that claim? Are there any protections for constitutionally based claims in bankruptcy?
In bankruptcy, the trustee usually takes ownership of most of the debtor’s assets, including potential lawsuits. This would apply to Section 1983 claims, although it feels counterintuitive given the personal nature of civil rights violations.
@Graydon
Right, that’s what seems unfair. Aren’t civil rights considered too personal to be treated like assets?
Zayden said:
@Graydon
Right, that’s what seems unfair. Aren’t civil rights considered too personal to be treated like assets?
Technically, even personal rights can be ‘assigned’ to the estate. The key issue here is whether they generate potential value for creditors.
Zayden said:
@Graydon
Right, that’s what seems unfair. Aren’t civil rights considered too personal to be treated like assets?
Yes, especially since Section 1983 claims often involve non-monetary values, like standing up for one’s rights.
Good question! I’d look at exemptions under the Bankruptcy Code, but unfortunately, civil rights claims don’t generally have special protections.
Riley said:
Good question! I’d look at exemptions under the Bankruptcy Code, but unfortunately, civil rights claims don’t generally have special protections.
Interesting. Are there any cases where the court allowed a debtor to retain their civil rights claims?
@Zayden
Some courts are sympathetic to the personal nature of these claims but are still bound by the Code. Appeals could argue it though!
It’s unfortunate, but in many cases, civil rights claims can become part of the bankruptcy estate. Bankruptcy law often treats them as ‘assets’ if they could lead to a financial recovery.
Winslow said:
It’s unfortunate, but in many cases, civil rights claims can become part of the bankruptcy estate. Bankruptcy law often treats them as ‘assets’ if they could lead to a financial recovery.
So it’s all about the potential financial outcome?
@Zayden
Pretty much. Bankruptcy focuses on the monetary value of claims, even if they’re based on personal rights.
Technically, since it could benefit creditors, the claim often does go to the trustee. You could file for an exemption, though it’s tough with civil rights claims.
Remy said:
Technically, since it could benefit creditors, the claim often does go to the trustee. You could file for an exemption, though it’s tough with civil rights claims.
Exemptions sound like a good route! Are there specific ones to look into for civil rights?
@Zayden
It depends on state law, but personal injury or non-economic harm exemptions might help if your state allows them.
@Zayden
Some states offer ‘wildcard’ exemptions that can be applied creatively for things like civil rights claims.
This feels like a loophole where the rights to seek justice are taken away. Shouldn’t Section 1983 cases stay with the debtor?
Taryn said:
This feels like a loophole where the rights to seek justice are taken away. Shouldn’t Section 1983 cases stay with the debtor?
Agreed. It’s frustrating, but as the law stands, it often treats these as assets. Some reform advocates are pushing to change that.
Since this involves constitutional rights, maybe there’s an argument for excluding it based on public policy?
Levi said:
Since this involves constitutional rights, maybe there’s an argument for excluding it based on public policy?
Public policy could be an argument, especially if creditors don’t stand to lose much by letting the debtor keep the claim.
Levi said:
Since this involves constitutional rights, maybe there’s an argument for excluding it based on public policy?
Yes! Public policy should protect people’s rights over creditors’ profits.