Can a Creditor Prevent My Debt from Being Discharged?
Are you planning to file for individual bankruptcy and anticipating that the majority of your debts will be discharged? In Chapter 7 bankruptcy cases in particular, debtors are counting on the discharge of eligible debts. Debtors also may be anticipating that certain debts will be discharged at the end of a Chapter 13 bankruptcy case. Yet you may be wondering if one or more of your creditors can take steps to block the discharge of your debt. Generally speaking, even if a creditor objects to the discharge of a debt, the creditor will only win their objection if the debtor engaged in some type of fraud or other wrongdoing related to the debt. Our West Palm Beach bankruptcy attorneys can explain in more detail.
How Creditors Can Object to a Discharge
Creditors can object either to the discharge of a single debt or to all debts being discharged (the latter meaning an objection to a general discharge). Typically, in order to object to a discharge of a single debt, a creditor will file an objection to discharge. At the same time, a creditor or the trustee may file an adversary proceeding, which will initiate a separate case with its own discovery process that will run parallel to the bankruptcy case. Most objections to discharge must be filed within 60 days from the date that the 341 meeting of creditors occurs in your bankruptcy case.
In most cases, creditors who object to a discharge will be objecting to a single discharge. The parties who will typically be involved in objecting to a general discharge are the trust or the US Trustee, depending on the type of bankruptcy case.
When Are Objections to Discharge Successful?
While a creditor may be able to file an objection for various reasons, this does not necessarily mean that their objection will be successful. In most cases, when an objection to a single debt or to a general discharge are successful, one of the following is true:
- Debtor committed bankruptcy fraud;
- Debtor attempted to discharge a credit card purchase for “luxury” goods or services within 90 days of the date of filing for bankruptcy;
- Debtor attempted to discharge a cash advance taken out on a credit card account within 70 days from the date of filing for bankruptcy; or
- Debtor committed another type of bankruptcy law violation or legal wrongdoing
Contact Our West Palm Beach Bankruptcy Attorney Today
When you file for bankruptcy, and for Chapter 7 bankruptcy in particular, you are most likely expecting a discharge of your eligible debts. If you have any questions about creditor objections to discharge, or the ways in which a creditor might seek to prevent the discharge of one or more of your debts, you should seek legal advice as soon as you can. One of the experienced West Palm Beach bankruptcy lawyers at Kelley, Fulton, Kaplan & Eller can discuss the details of your case with you today, and we can help you to understand your options if you are currently facing creditor objections or have reason to expect objections from one or more creditors. Contact our firm today for more information.
Source:
law.cornell.edu/uscode/text/11
