Either a creditor or the trustee can file an objection to the discharge of your case. An objection that applies to your entire case is usually based on a charge that the debtor committed some type of fraud. The following are all considered bankruptcy fraud.
- Transferring property to another person to avoid including it in your bankruptcy filing.
- Providing false information, such as failing to list all of your assets, on your bankruptcy petition and schedules
- Perjuring yourself during a bankruptcy proceeding
Knowingly and fraudulently making a misrepresentation of material fact in your bankruptcy case is a federal crime. Federal prosecutors can bring charges and the penalty may include time in prison as well as substantial fines.
Objection to a Specific Debt
An objection to a specific debt is usually filed by the creditor (but can also be filed by the trustee). Any creditor may file an objection to the discharge of their specific debt. The objection must be filed within 30 days of the 341 Meeting of Creditors or the filing of any amendments by the debtor to the list of exempt property.
If the debtor is making an objection based on the argument that the debt is of one of the types that is discharged unless the credit objects then the creditor has the burden of proof of showing that the debt fits within that nondischargeable category of debt. If the creditor wins their challenge to the disposability of a specific debt it does not affect the rest of the case or the discharge ability of any other debt. The types of debt that usually fall into this category are listed below.
- Debts that were used to pay nondischargeable tax debts.
- Debts that are the result of willful and malicious injury by the debtor to the property of another.
- Aggregate credit purchases for luxury goods totaling more than $650 in the 90 days prior to filing bankruptcy. If you can show that you intended to pay the charges or that the items were not in fact “luxury goods” then the creditor will lose the objection and the debt will be discharged.
- Cash advances totaling more than $925 from any one creditor in the 70 days prior to filing bankruptcy. If you can show that you intended to pay the debt back or that the debt was for business purposes then the creditor will lose the objection and the debt will be discharged.
A credit card issuer might object to the discharge on the on the basis of fraud. The evidence of fraud can take the form of large amounts of charges a short time before filing bankruptcy or immediately before or after contacting an attorney about filing bankruptcy. Continuing to use the card after there is some evidence that you don’t have the ability to repay the debt, after you have been issued past due notices, after you’ve reached your credit limit, or you have been asked to return the card all can serve as signs of fraud.
Bankruptcy is complex and many answers depend upon your specific situation. If you still have questions you can schedule a free consultation with a bankruptcy attorney.