Objections By Creditors in the Bankruptcy Process

During the bankruptcy process, several things need to happen. You must state that you cannot meet your previously agreed upon promises to repay borrowed funds. You must turn over any type of property that is not protected under the bankruptcy exemptions so that it can be sold and the proceeds distributed to your creditors. During this process, creditors can come forward and object to the process, on various levels.

What Objections Mean

Creditors are able to come forward in many circumstances during the bankruptcy process. They may object to various situations and circumstances. For example, creditors may object for these reasons:

• The creditor believes that you are not listing all assets on your bankruptcy documentation. If the creditor knows of other assets, it is likely they will come forward.
• The creditor may object to the amount of debt or the terms of the account, you have listed in your bankruptcy documentation.
• The creditor may object just to force the bankruptcy trustee to take a closer look at your bankruptcy documentation in the hopes of uncovering some type of mistake or simply because they do not believe, the process should continue.
• In Chapter 13 bankruptcy, the creditor may object to the repayment plan as it is outlined.

There are other reasons that an objection by creditors can occur during the bankruptcy process. However, it is rare that any will occur. In many instances, especially in Chapter 7, there are few assets to recover and therefore most creditors do not hire attorneys to fight such objections.

Rules for Objections

The good news for consumers filing bankruptcy is that there are limits on when and how creditors can object to your bankruptcy.

• Only creditors that have specific debts listed in your bankruptcy can object.
• In Chapter 7, creditors have 60 days after the first creditors meeting to make an objection.
• In Chapter 13, creditors can object to the repayment plan. The court will take this into consideration, but this does not automatically mean that the claim will be investigated further. That is up to the bankruptcy trustee.

Talk to a Bankruptcy Attorney for Advice

The bankruptcy process follows a very specific outline. It is critical for objections to be handled in a timely manner. In most cases, this simply means providing documentation that refutes the creditor’s claims. However, it is always a good idea to have legal help throughout this process. With the aid of an attorney, you can ensure that if creditors do object that the bankruptcy process will continue for you afterwards.