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Casey Anthony files for chapter 7 bankruptcy relief

The nation followed news reports of the high-profile criminal trial of Casey Anthony nearly two years ago. The woman was acquitted of murdering her child, and convicted of lying to police. But the criminal trial is not the only legal issue that the woman has faced. She currently is facing three civil suits in Florida. Sources now say that Anthony has filed a chapter 7 bankruptcy petition seeking to discharge numerous debts.

This blog has previously discussed the automatic stay that occurs when a bankruptcy petition is filed. The automatic stay puts a halt to nearly all attempts to collect upon a debt (although the Bankruptcy Code specifies a few distinct exceptions, such as an IRS audit among others).

The civil lawsuits against Casey are reportedly on hold as a result of the automatic stay. The plaintiffs are expected to continue to pursue the civil cases in the future. Essentially, the plaintiffs will have to show that the damages sought in the civil lawsuits are nondischargeable in bankruptcy.

Nonetheless, Anthony says that she has filed for chapter 7 bankruptcy relief to find closure and move forward. Her bankruptcy petition lists total assets of slightly over $1,000 and liabilities of more than $792,000. But the bankruptcy petition also lists nearly 100 names of people or organizations that may have potential claims against the woman. Her civil lawyer told CBS 5 in Phoenix that the number of potential claims that could arise left no other choice but to file for bankruptcy.

The potential claimants would have to file a claim in federal court to seek money from Anthony. The bankruptcy court may have to decide issues if potential creditors come forward.

The woman filed for bankruptcy late last week, and it is not clear if any creditors listed in the bankruptcy papers will seek to challenge issues in the bankruptcy court, or attempt to seek relief from the automatic stay. However, at least one lawyer in a civil suit against the woman

Source: KPHO CBS 5, "Casey Anthony explains bankruptcy in exclusive CBS 5 interview," Adam Longo, Jan. 28, 2013

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