Downers Grove Bankruptcy Attorney On Dischargeability Of Debts

After the 341 meeting of creditors there is a waiting period of approximately two months before the case closes.  The reason for this two month waiting period is to give creditors an opportunity to object to the discharge by filing an adversarial complaint.  An adversarial complaint it is a complaint filed by a creditor of the debtor basically claiming that that debt should be held to be non-dischargeable for some reason.  Often times, non-dischargeability will be based on fraud.  Other times non-dischargeability will be based on the fact that that particular debt is of the kind that is non-dischargeable by the code however the creditor wants the comfort of having an order stating that the debt is non-dischargeable.  In 99 percent of the cases there is no creditor filing an adversarial complaint however when there is an adversarial complaint filed the debtor has an opportunity to defend himself against that creditor and ultimately it could come down to a hearing before a United States Bankruptcy Judge to determine whether or not that debt is dischargeable. 

Dischargeable debt includes recent taxes, parking tickets, child support, maintenance payments, alimony payments; debts due to DUI driving that caused personal injury.  Those types of debts are non-dischargeable and do not need an adversarial complaint filed. 

The most common adversarial complaint that we see filed is that concerning credit cards and the debtor’s ability to incur debt too close to filing the bankruptcy.  For example, if someone has an American Express card and they know they are going to be filing for bankruptcy and they decide to run up the charges on that card to the max just before they file American Express is most likely going to file an adversarial complaint stating that the debt should be non-dischargeable because the debtor knew at the time he or she made those charges that they were seeking bankruptcy protection or they were going to be seeking bankruptcy protection in the very near future.  In those cases if those charges were made too close to filing the creditor will likely win and the debt will be determined to be non-dischargeable. 

Now this does not mean the debtor’s bankruptcy case is thrown out it only means that that particular debt is going to be due and owing after the case goes to completion.  American Express will still have to pursue the debtor and collect on the debt.  So just having a determination that a debt is non-dischargeable does not necessarily mean that the debtor is ever really going to have to pay it or that the creditor is actually ever going to collect upon it.

Downers Grove Bankruptcy Attorney