Can creditors stop the discharge of my debts?

Chapter 7 bankruptcy filers are typically individuals who have found themselves burdened by hefty debt. Millions of Americans find themselves in the position of being weighed down by debt each year. In filing for Chapter 7 bankruptcy, your ultimate goal is to obtain a complete discharge of your debt. Chapter 7 bankruptcy can allow you to wipe out certain debts so that you are no longer personally liable and the creditor has no right to collect on the debt. Not all debts, however, are capable of discharge. Even further, creditors and others have the power to object to the discharge of your debts. Our Xenia, Ohio Chapter 7 bankruptcy lawyers discuss when and under what circumstances a creditor could object to discharge of your debts.

Dischargeable Debts

Debts fall under two main categories in a Chapter 7 bankruptcy: Dischargeable and non-dischargeable. Dischargeable debts typically include medical bills, credit card debt, personal loans, and utility bills. Non-dischargeable debts might include student loans, taxes, and domestic support obligations. Should you file for bankruptcy attempting to seek discharge of these non-dischargeable debts, creditors will typically not object because the law supports the fact that these obligations will persist post-bankruptcy. Creditors can, however, object to the discharge of the otherwise dischargeable debts.

Objections to Discharge

Creditors, the bankruptcy trustee, and the U.S. trustee all have the power to file an objection to the discharge of one or more of your debts. These individuals have 60 days from your meeting of creditors to file an objection. Trustees will usually only object if they feel you do not qualify for bankruptcy per the code or you lied in your filings. Creditors will usually only object to specific debts as non-dischargeable based on how you obtained the debt or when.

Creditors can object based on several grounds. One type of objection is based on recent cash advances. If you took an advance of over $1,000 from a creditor in the 70 days before filing for bankruptcy, the debt may be deemed non-dischargeable. Further, if you charged large sums for luxury items within a 90-day period before filing for bankruptcy, a creditor can object.

If a creditor files an objection to discharge of the debt, you will then have the chance to respond. Both sides will be able to submit evidence. Often, creditors will end up settling with the debtor to save on litigation costs. Your bankruptcy lawyer will assist you in going through the discharge process and responding to any objections.