The point of filing a Chapter 7 bankruptcy is to wipe out your debts. In most Chapter 7 bankruptcy cases, debts are discharged at the end of the bankruptcy. In some cases, creditors or the bankruptcy trustee can challenge whether a particular debt can be discharged, or even whether all of your debts can be discharged in bankruptcy. These are called objections to discharge.
Normally after a Chapter 7, you are not required to pay back the discharged debts once the case is over. Not all debts can be discharged in bankruptcy – some common examples of non-dischargeable debts include student loans, alimony, and child support.
If someone objects that one of your debts can be discharged, that party must file an objection with the bankruptcy court. The deadline in which to file an objection is 60 days after the meeting of your creditors. There are two types of objections to discharge – an objection to discharge a particular debt, and an objection to the discharge of all of your debts.
One of your creditors may choose to object to the discharge of a particular debt. This type of objection does not affect any of your other debts. If the creditor wins the objection, that debt will not be discharged and you will be required to repay the debt. The most common grounds for these types of objections include that the debt is not dischargeable or the debt was obtained by lying on the loan application.
The other type of objection is when a creditor or the bankruptcy trustee objects to the discharge of all of your debts. That type of objection is usually connected with some type of fraud committed by the debtor, such as giving assets away before filing for bankruptcy, or lying on the bankruptcy paperwork or to the bankruptcy judge. Also, if the debtor fails to produce adequate financial records, hides assets, or destroys assets, the bankruptcy case will normally be dismissed.
The only parties that can object to your bankruptcy include your creditors, the Chapter 7 bankruptcy trustee, and the U.S. Trustee. Most of the objections to a bankruptcy trust are brought by creditors. Creditors often assert a variety of reasons why a debt should not be discharged. The Chapter 7 bankruptcy trustee has to make sure that all assets are collected and all creditors are treated equally. If you have committed bankruptcy fraud, it’s the trustee’s job to deny your discharge. Finally, the U.S. Trustee can also object – this is normally done for a violation of the bankruptcy code.
The good news is that in most Chapter 7 bankruptcies, all of the dischargeable debts are discharged. If you have questions about how a Chapter 7 bankruptcy works, call the Atlanta bankruptcy attorneys at Holston & Huntley. Call us today at (404) 620-3337 consultations are free and you are under no obligation to use our services. We serve Metro Atlanta Georgia as well as Birmingham Alabama including surrounding areas.