Terminated employees sometimes have to file for bankruptcy. Sometimes they sue former employers, too. In that case, they’re required to inform the bankruptcy court about their pending lawsuit.
If you lose a lawsuit, have your attorney find out whether the former employee has filed for bankruptcy. You may find that you have a “get out of jail free” card.
Recent case: Former firefighter Kim Lubke won a large verdict against his employer for allegedviolations. But while that case was on appeal, he and his wife filed for bankruptcy. Neither listed the verdict as an asset. The bankruptcy court discharged over $300,000 of their debts.
When the court handling the discrimination case found out, it told Lubke that his deception had cost him the right to collect the verdict. (Lubke v. City of Arlington, No. 09-16-2010, 5th Cir., 2010)
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