POSTED BY MARK & BROWN, P.A. || 22-MAY-2015
Anyone can fall on hard times. Many residents of the Orlando, Kissimmee, and Central Florida community have found themselves in difficult financial straits, and for some of these people, bankruptcy has offered a much needed answer to overwhelming debt. However, there are potential pitfalls associated with bankruptcy which you need to be aware of. One of these is the potential for a creditor’s objection to your discharge.
Purpose Of Bankruptcy
The primary purpose of any bankruptcy is to obtain a discharge. In a Chapter 7, it is the discharge which gives you a clean slate and a fresh start, and in a Chapter 13, it is the discharge which offers personal and financial satisfaction after you complete your repayment plan. The discharge means that creditors can no longer seek collection on any of the debts which were included in your bankruptcy.
Creditors May Object To A Discharge
Unfortunately for the filer, their creditors are allowed to object to their discharge. Both Chapter 7’s and Chapter 13’s allow for this. For this to happen, the creditors and the trustee appointed to oversee and administer must file objections to a discharge in writing within 60 days of the meeting of creditors. If this happens, then a hearing will be held where a judge will rule on the objection. If judge approves the objection, then the debt in question will not be discharged.
A creditor has the right to object to the discharge in part or in total. This means that they may object to only particular debts, or they may object to all of the debts listed in the bankruptcy petition. it should be noted that an objection will only impact those debts which the creditor objects to.
Creditors who object to a discharge will usually try to prove at least one of the following:
- That you obtained the credit or property through fraud
- That you engaged in fiduciary fraud, larceny, or embezzlement
- That you caused “willful and malicious” injury
- That you purchased luxury goods within 90 days of filing
- That you used a Cash Advance within 70 days of filing
If the court grants the creditor’s objection, then you will remain personally liable for each debt which the creditor successfully objected to.
Now, if a creditor files an objection against all of your debts, it is generally based on an argument that your entire case is predicated on fraud. Bankruptcy fraud – which includes perjury on official documents or bankruptcy hearings – is a serious offense. Penalties can include the denial of your petition and even jail time.
It doesn’t matter how much debt you are dealing with. Never put yourself in a position to commit fraud.
Contact Us For More Information On Bankruptcy
Please feel free to contact our offices if you would like more information on bankruptcy. We would be happy to schedule you a free consultation with a bankruptcy attorney.