Most bankruptcies go off without a hitch. As long as you work with an experienced attorney, once your petition is filed and you attend the meeting of creditors, all that’s left is to wait for the passage of time and for the court to enter your discharge order. Getting a discharge order means that you are no longer legally liable to repay your dischargeable debts.
But occasionally, you can run into a hitch along the way. One of those “hitches” is a creditor objecting to your discharge. Under Federal Rule of Bankruptcy Procedure 4004(a), a creditor has 60 days from the meeting of creditors to file a complaint objecting to your discharge. Why would a creditor object? One reason might be that you lied on a credit application about your income. Another is that the Bankruptcy Code charges to one creditor for luxury items over $600 within 90 days of filing and cash advances over $875 from one creditor within 70 days of filing are presumed nondischargeable. There are other grounds for objecting to your discharge, and an experienced attorney should be able to identify potential objections. It might be possible that filing Chapter 13 instead of Chapter 7 will avoid some objections.
Once a creditor has filed a complaint, your attorney has 28 days to respond. After your attorney reviews the creditor’s claim, you have a couple of options. The first is that you can negotiate with the creditor to settle the debt. You’ll likely be able to get fairly reasonable terms, including a reduction in principal, suspension of interest accrual, and monthly payments. But if you and your attorney don’t think their claim is valid, you can fight their objection. Of course, your attorney might expect additional fees. Defending an objection is typically not included in the flat fee that most bankruptcy attorneys charge.
If you have questions about the bankruptcy process or wonder if a creditor might object, then we hope you’ll come in for a free, no-obligation consultation with a bankruptcy attorney. You can schedule your appointment online or call 303.331.3403 to set up a time that is convenient for you.