What You Should Know About Creditors Objecting To Discharges In Chapter 7

One of the only times you will have to appear in court when filing for Chapter 7 bankruptcy is for a meeting of the creditors, and this typically takes place within just a few weeks after you file for Chapter 7. Some of your creditors may show up to this hearing, but they will only show up if they want to object to the discharge of the debt you owe them. Here are several things to understand about creditors challenging your bankruptcy filing.

The law gives them the opportunity to challenge a discharge

The first thing to understand is that the law gives creditors the right to challenge or object to a discharge of debt that you owe them. Because of this, creditors are invited to attend the hearing you have for your case, and the meeting is called a meeting of creditors because the creditors are invited to come. In many cases, there are no creditors present at these hearings, though, and this is because most creditors do not object to a discharge, simply because they do not have probable cause to object. If a creditor does show up for the hearing, they will need to have a valid reason for challenging the discharge of the debt you owe them.

The reasons creditors object to discharges

In most cases, creditors will object to discharges when they feel the person filing committed some type of fraud. For example, if the person filing for bankruptcy recently opened up a new line of credit and lied on the application, this could be considered fraud. Another example is when a person racks up credit cards bills right before filing for bankruptcy, simply because the person wanted to have stuff and not have to pay for it. When creditors suspect things like this, they may choose to challenge the discharge.  

The court decides the verdict

It will always be up to the bankruptcy court to make the decision when creditors object. Therefore, your creditors will get to state their side of the story, and you will get to state yours, and the court will decide based on the testimony of both sides and the law.

If you are filing for Chapter 7, there is a chance one or more of your creditors will object. If so, your lawyer will be there to help and guide you through this. If you have questions about this, talk to a bankruptcy lawyer today.