The general goal in a bankruptcy proceeding, is, as much as possible, to discharge debts, so that you no longer have a legal obligation to repay them.
Some debts, such as child support, most taxes, student loans, or alimony are automatically non-dischargeable. This means the creditor does not have to do anything to avoid discharge of their debt. Other debts, however, can get discharged unless the creditor disputes the discharge their debt by filing a Complaint for Non-Dischargeability which starts what is known as an “adversary proceeding” (a bankruptcy-specific term for a lawsuit filed inside a bankruptcy case). As a general rule, such a Complaint must be filed within 60 days of the first date scheduled for meeting of creditors in your bankruptcy case.
The Types of Non-Dischargeability Actions that May Be Filed
There are a number of grounds under which a creditor could file for non-dischargeability of debt:
- You obtained the debt through false or fraudulent pretenses, such as misrepresenting your income or other debt at the time you applied for credit
- You bought luxury items in excess of the amount allowed under the bankruptcy laws within 90 days of the filing
- You took out cash advances in excess of the amount allowed by the bankruptcy laws within 70 days of the bankruptcy filing
- You used dischargeable debt to pay a non-dischargeable obligation—For example, if you use a credit card to pay for child support or taxes, you will likely not be able to discharge that credit card debt.
As a general rule, creditors tend to file objections only with respect to the debt owed them. However, if there is evidence that you have perpetrated a fraud on the bankruptcy system by hiding assets or income, or by transferring money or assets to family or friends, a creditor may ask the bankruptcy court to disallow the discharge of all your debts..
Contact Neuner & Ventura, LLP
At Neuner & Ventura, LLP, we provide a free initial consultation to every client. To set up a meeting, call Neuner & Ventura at 856-596-2828 or send us an e-mail. We do, however, reserve the right to charge a fee to review any work done by another attorney. Evening and weekend appointments are available upon request.
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