Fu, In re

Ruling: 
Debtor's discharge did not bar cross-claims asserted as setoffs as debtor had not disputed thevalidity of judgment and had not yet attempted to undermine the merits of the cross-claims.(Bankr. N.D. Cal.)HOLDINGS; [1]-A judgment creditor's collection efforts against a third party did not appear, at the earlystages of the pending litigation, to violate a debtor's discharge injunction because a sole spouse's Chapter7 discharge generally insulated pre-petition community property from discharged pre-petitioncommunity claims, and the creditor's declaratory relief request was to determine the bonafides of thedebtor's divorce, and if the divorce was a sham; [2]-The debtor's discharge did not bar cross-claimsasserted in pending state litigation to the extent they were asserted as setoffs under 11 U.S.C. § 553because the debtor had not disputed the validity of a judgment held by the creditor asserting the crossclaims and had not yet attempted to undermine the merits of the cross-claims.Fu, In re, 2020 Bankr. LEXIS 2514 (Bankr. N.D. Cal. September 25, 2020) (Novack, B.J.).
Issue: 
Setoff.
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Consumer case opionion summary, case decided on September 25,2020, LexisNexis #1120-014