What to Do If a Creditor Files Adversary Proceeding

What do you do if a creditor objects to a bankruptcy discharge or files an adversary proceeding? Even when going through the legal process of bankruptcy to start with a clean, debt-free slate, you will face many obstacles, and creditors might not be eager to absolve you of your debt. Keep reading to learn more about what a bankruptcy discharge is, what happens when creditors object to a bankruptcy discharge, and what you should do about it.

What is a Bankruptcy Discharge?

In short, a bankruptcy discharge under Chapter 7 would make you debt-free, and it is something that your creditors will have to help you with. The problem is, the court will allow your creditors to accept or reject your new status in bankruptcy, and although they are not supposed to keep calling you about your debts, your bankruptcy petition might not be welcomed with acceptance from your creditors. The process can be worrisome, but there are steps to take to prevent problems in the future and to keep making a financial turn-around despite setbacks.

Speaking at 341 Creditors Meeting

When you file, you will often have to have a meeting with all your creditors and explain, under law, that you have claimed all that you own in your filing and that you are taking the right steps to go through with your bankruptcy program. You’ll have to answer questions about your application, financial status, and other items – and creditors and the court will determine how eligible you are for bankruptcy and whether your creditors will decide to work with you.Many creditors are concerned about fraud, and at these meetings they will try and point out if you are not being truthful about what you own. They might even object to discharge you of debt. Because of these fears of fraud, this process can be scary for you as someone applying for bankruptcy. By being truthful about the process and honest about what you own, you are more likely to not get objections to your bankruptcy discharge.

What to Do if There is an Objection

Within two months, a creditor can decide if they believe your case. If they object, and prove that you are lying to the court, your bankruptcy petition may be denied by the court. You want to make sure you don’t hide your possessions or give away assets before your bankruptcy filing.

Getting Help

The minute you feel that you are not being understood by the court, you will need a bankruptcy lawyer. It can be hard to stand up for yourself against creditors, and it can be particularly terrible if they try to prove you are lying when you are being honest. With legal help, you might be able to turn the court’s decision around and explain any problems that originally arose.

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