Can I Get Out of My Bar Tab in Bankruptcy?
Remember when you could walk out of a bar or restaurant by simply telling the bartender to “put it on my tab”? It’s been a while since most of us have seen this in New York City, but there are still plenty of neighborhood places, bars, restaurants, independent grocers etc that will work with their customers on a friendly credit basis. Clients will occasionally ask if filing for bankruptcy will get rid of an ongoing bar tab they have with their neighborhood pub. It would be hard to imagine a case where we would advise a client to file for Chapter 7 over a bar tab alone, but yes, the tab would be one of your debts most likely to be entirely eliminated, or discharged, in your bankruptcy.
The main goal of filing for bankruptcy is to get help with overwhelming debt and to get a fresh start on life. Most people that file for Chapter 7 in New York City will be able to successfully eliminate almost all of their debt in the process, including a tab they may have run up with a favorite bar or restaurant.
A Chapter 7 bankruptcy discharge releases you from any further responsibility for the debts you incurred prior to filing. Your creditors must stop any collection efforts. You will have a legally issued court order that officially forgives your debt. You never have to pay it back. Although not all debt is dischargeable in bankruptcy, the large majority is. And with the huge reduction in your monthly bills provided by the discharge you will be in a much better position to pay possible debt that survived the bankruptcy.
Your bartender might be your buddy. After all, she’s letting you rack up a tab. But as tempted as you may be to repay her before filing for bankruptcy, realize this could get you into trouble. Be very careful here. Talk to an attorney first because while paying up may seem like the right thing to do, preferential payments could get you into trouble. Your attorney can help figure out how to take care of your local pub without getting you into legal trouble. Even if they don’t get a penny on your bar tab after you file Chapter 7 the bar is still legally prohibited from denying you a drink or from asking you about the debt when you sit down at the bar. They can’t punish you for going bankrupt.
There are of course some consequences to filing for bankruptcy, but if your debt trouble is overwhelming then the benefits of filing Chapter 7 will far outweigh the consequences. If you live in New York City and need to learn more about how to instantly get your creditors off your back contact the Law offices of William Waldner online or at 212. 244.2882 to arrange a free consultation. We help all New Yorkers with affordable bankruptcy assistance and have a 99% Chapter 7 Bankruptcy discharge record as of 8/31/16.
This article is intended for educational purposes only. By reading this article no attorney-client privilege has been created.