A creditor cannot object to your discharge simply because they don’t like you, nor can they object to your discharge for no reason at all. There are various reasons in the law why a creditor can object to your discharge. When a creditor feels it has a basis for objecting to your discharge, it files what is known as an Adversary Proceeding. An adversary proceeding is a lawsuit within your bankruptcy to determine whether the debt owed to that creditor is dischargeable in bankruptcy. In the adversary complaint, your creditor has to state the reasons for its objection to your discharge.
There are a number of reasons why a creditor could seek to exclude the debt owed to them from discharge. If you committed fraud in connection with obtaining the loan, that would provide a basis to object to discharge of that debt. If you accumulated debt in anticipation of filing for bankruptcy, that could provide your creditors with a basis to object to discharge. Loans you incur or credit card debt you accumulate during the 90 days’ prior to filing for bankruptcy are more likely to have the discharge of debt objected to.
If your creditor objects to discharge, debts you accumulate within the 90 days’ prior to filing for bankruptcy are presumed by the Bankruptcy Court to be non-dischargeable. It is very difficult to rebut this presumption. If possible, it is better to wait 90 days after the last time you incurred any debt before you file for bankruptcy. Simply waiting the 90 days significantly decreases your chances of having a creditor object to discharge. Even if the creditor still objects, the Bankruptcy Court is not required to presume that the debt objected to is non-dischargeable so long as 90 days have passed between the last time debt was accumulated and the date you file for bankruptcy.
The above information is a general overview and is not intended to be used as legal advice. If you are considering filing for bankruptcy, the best thing to do is call our office at 248-557-3645 and schedule a free consultation so you can receive advice which is tailored to your specific circumstances.
By: Michael Benkstein, Esq.
Managing Attorney, Bankruptcy Department
The Law Offices of Joumana Kayrouz, PLLC