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Church forced into bankruptcy in order to reduce its lawsuit payouts

The Roman Catholic Church in the State of Montana, recently claimed Chapter 11 bankruptcy protections as reported by NBC News in a January 31, 2014 article. The Church felt that this was a good option because this would allow the Church to reduce or eliminate the numerous lawsuits that are currently pending against its members for child abuse.

Chapter 11 bankruptcy allows for companies and businesses to reorganize its business plans which will help reduce or eliminate its debt, and a trustee is then appointed who runs the business. Individuals can also file a Chapter 11 bankruptcy. The Church felt that a bankruptcy was the best option as it could reach an agreement with the injured parties, which is currently close to 400 individuals, and also the bankruptcy would allow the church to continue functioning. The suits that are now pending against the Church were filed about four years ago, and it has claims spanning from about 1940 to 1980.

The claims allege that the church “knew or should have known what was happening.” It will cost the Church about $15 million dollars to resolve the pending suits. While the insurance the Church has will cover some of the costs, the Church will be responsible for the rest. However, this plan has to be approved by Montana’s bankruptcy court. Moreover, there is an additional $3 million that has been allocated for those who have been abused and have not come forward as of now.  So many people have come forward as one of the Bishops urged those who have been abused to come forward and tell their story.

Personal bankruptcies need no be complex. If you are behind in your mortgage payments or if you have a lot of credit card debt, then you should consider speaking with a qualified attorney. Jayson Lutzky, who has over 30 years of legal experience, can help. He offers free in person consultations at his Bronx, NY office. Call 718-329-9500 to set up a confidential consultation. For more information, you may also read our blogs related to bankruptcy at www.MyNewYorkCityLawyer.com/category/bankruptcy/.

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