My bankruptcy clients ask me whether or not their creditors can object to a discharge. Once again the answer depends on which Chapter you are filing for bankruptcy under.

If you file under Chapter 7 you do not have an automatic right to a discharge. Your creditor may file an objection to your discharge, and so may the trustee in your case, or the U.S. trustee. Soon after the case is filed, your creditors will receive a notice that will include the deadline for objecting to the discharge as well as other essential information.  Your creditors must file a complaint in the bankruptcy court prior to the deadline if they intend to object to your discharge. Once they file a complaint a lawsuit is initiated. It is referred to as an “adversary proceeding.”

A Chapter 7 discharge may be denied by the court for any of the following reasons (which are described in the Bankruptcy Code):

• failure to provide your requested tax documents
• failure to complete a course on personal financial management
• transfer or concealment of your property with intent to hinder, delay, or defraud creditors
• destruction or concealment of your books or records
• perjury or any other fraudulent acts
• failure to account for the loss of your assets
• violation of a court order
• a prior discharge in a prior case that began within a certain time frame before the date the petition was filed (the issue of time frame will be discussed in a later blog)

If the objection to your right to a discharge goes to trial, the objecting party has to prove all of the facts essential to the objection.

In Chapter 12 and Chapter 13 bankruptcy cases, you are entitled to a discharge after you complete all of the payments under the plan. Under Chapter 13 a discharge may not occur if you fail to complete a required personal financial management course, or if you received a prior discharge in another case that began within certain time frames to be discussed in my next blog. An important distinction between a Chapter 7 and Chapter 12 or Chapter 13 is that your creditors do not have standing to object to a discharge. Your creditors may object to confirmation of your repayment plan, but may not object to the discharge if you have finished making plan payments.

If you live in Denver, Aurora, Arvada, Brighton, Broomfield, Commerce City, Englewood, Highlands Ranch, Lakewood, Lafayette, Littleton, Northglenn, Westminster, Wheat Ridge, or Golden, Colorado, please feel free to contact me with any questions.

Kevin D. Heupel, Colorado Bankruptcy lawyer, 303-955-7570, Colorado Bankruptcy Help Email, personal bankruptcy free-consultation form.