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Is the burden upon the Creditor to prove misuse, fraud or running up a credit card, when objecting a bankruptcy discharge?

Glendale, CA |
Attorney answers 6


Yes. The presumption is that a credit card is a unsecured non-priority dischargeable debt. The creditor must prove with a preponderance of the evidence that you incurred the debt fraudulently. Thats a hard thing to plead. It must be pled with "particularity" or "specificity." Any more questions?

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I am evaluating all my options (struggling to make mo. payments, credit counseling, chapter 7/13). I have not made a clear decision, just weighing my options.....and currently making charges to my credit cards. Am I fraudulently charging debt, if I decide to pursue my bankruptcy options within 90 days? BTW, I am current on all my debts.


Actually, if cash advances over $925 were taken within 70 days or "luxury" purchases over $650 within 90 days, there is a presumption of non-dischargeability and the burden falls on the debtor to rebut the presumption ... but only if the creditor files an Adversary Proceeding to pursue that objection.


As you can see from the prior answers, the response is "It depends." Generally, it is the Creditors burden to prove the fraud or use of a false financial statement, BUT, if the card was charged upon for certain things such as luxury goods, cash advances, or in come instances consumer debt within a few months of filing, there is a presumption that the debt was incurred through fraud. It then becomes the Debtors (your) responsibility to prove lack of fraud, if possible.


The burden of proof is on the creditor when they object to a discharge. What they have to prove depends on what legal grounds they are using to object to your discharge. If you do not respond to the adversary proceeding they can get a default judgment and you will still be liable for the debt. Make sure you file an answer to the adversary.


As you see, recent luxury or cash advances can be presumed to be nondischargeable. Presumed or not, a creditor still has to file a complaint within the bankruptcy court objecting to the discharge of a debt. They have to prove that you did not have an intention to repay the debt when you incurred the charges. The factors the court looks at to determine if a debt should be exempted from discharge include your employment history, number and amount of the charges, and whether the charges were different than your normal spending pattern and whether you ran up charges in a short period of time. After you file bankruptcy you then have a "meeting of creditors." At this hearing the chapter 7 trustee gets to asks you a few questions about your assets and liabilities. This hearing is about a month after you file your bankruptcy. Creditors have only 60 days from the "meeting of creditors" to file a complaint to object to the dischargeability of a debt. It's not a lot of time and if they miss the deadline they are foreclosed from taking any action in the future.


Yes, the burden of proof is on the Creditor and its based upon a preponderance of evidence. There is a presumption that a credit card is an unsecured non-priority dischargeable debt until proving otherwise.

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