Whether it is a Chapter 7 bankruptcy or a Chapter 13 bankruptcy, Tennessee debtors who are moving forward with the process should be aware of certain issues that could arise. One issue is the discharge and whether creditors can lodge an objection to it before it is granted. Understanding when creditors might object is critical to a filing.
With a Chapter 7 bankruptcy, there is no automatic discharge. The creditor, trustee on the individual case, or a U.S. trustee can object. There is a deadline for which creditors have to file an objection. If there is an objection, the creditor must file a complaint prior to the deadline. After the objection, an adversary proceeding will begin. Reasons for a discharge to be denied include not providing tax information, not completing a financial management course, transferring or concealing property to damage the creditors, destroying records, committing perjury, not accounting for lost assets, or violating a court order related to an earlier case.
With a Chapter 13 bankruptcy, the debtor will generally receive a discharge when the plan is completed. Failing to complete the financial management course could result in a denial of a discharge. With Chapter 13, creditors cannot object to the discharge as they can with Chapter 7. They can, however, lodge an objection to confirmation of a repayment plan. Once the plan is finished and all payments are made, creditors have no standing to object to a discharge.
People who are having financial struggles and see bankruptcy as a strategy to get back onto stronger financial ground must remember that it is necessary to adhere to the rules of the process to ensure the discharge is granted. When there is an objection or a reason that the creditors or trustee might object, it is imperative to do what is necessary to get the discharge. A law firm experienced in bankruptcy can ensure that the case is done correctly and all information is provided.