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Can our creditor object to my bankruptcy filing? How can they object?

Paterson, NJ |

Can our creditor object to my bankruptcy filing? How can they object?

Attorney Answers 3

  1. Yes, a creditor can object to your bankruptcy filing if they have grounds to do so. For instance, fraud or knowledge of hidden assets. Depending on the reason for the objection, the creditor may seek to have only their debt survive your bankruptcy. The US Trustee can also object to your bankruptcy filing (if you are over income on the means test for a Chp 7 is a good example).

  2. The above answer is fine, but I want to add - a creditor may also object to your exemptions, if they are improperly utilized.

    That said, by far the most utilized objection by creditors in a Chapter 7 case is that under §523 for fraud of the creditor, as stated more eloquently above.

  3. The thing that needs to be said is that a creditor can object to your bankruptcy filing. The second thing you need to know is that there are two kinds of objections. The more serious one is where the creditor asks the court to declare none of your debts to be discharged (forgiven/wiped out). For this to happen the person objecting must prove one of the following: you filed bankruptcy before and you are not eligible to your debts discharged again because it is too soon. Another reason for denying you a discharge of all your debts is that you failed to report on your bankruptcy documents an asset(s). The third reason is that you lied on the forms you filed with the court or in the statements you made to your trustee.

    The second kind of objection is to the forgiveness of the debt you owe that particular creditor. This is called an objection to dischargeability. Some debts are never forgiven in a bankruptcy case like student loans and alimony/child support and recent income taxes. On objection from a creditor is most likely to come from a credit card company that says your use of their card was fraudulent. The most common of these happens when people use a credit card in the months before filing and significantly increase the balance owed on the account through purchase or money taken as a cash advances.

    The best thing for you to do is raise this issue with your lawyer before you file your case. If your lawyer knows there is an issue like this there are things a lawyer can do to greatly reduce the risk of a creditor successfully objecting to the forgiveness of your debt to them.