I have been named in a small claims case?

I have been named in a small claims case along with my mother & sister in-law from the funeral home which provided the burial services for my father in-law for the amount of 5000.00. The claim is that one or more of us at time we rendered their services should have known that his life insurance policy had lapsed. We did not find out that the policy was lapsed until after the funeral had taken place. Now at the same time due to his illness my father and mother in law filed for bankruptcy to reorganize their debt to try and keep their home and when my father in-law died my mother in-law lost the home and went to the next level with the bankruptcy for protection against creditors. The funeral home was listed as a creditor and was given the opportunity to contest the bankruptcy but did not do so at that time. Now they are taking all of us to small claims. Does this case have any merit? I feel they have forfeited their right to collect by not contesting being listed the bankruptcy. Am I correct in thinking this way?