Do creditors have a way to prevent you from discharging their debt in bankruptcy?

Individuals who find themselves owing more each month than what they can afford to pay file bankruptcy to reduce their debt obligations. Creditors must stop trying to aggressively collect debts from the moment you file your case.

While the bulk of your unsecured debts are eligible for discharge, there are a few exemptions. There are even some instances in which a debt may typically be dischargeable in bankruptcy, yet a creditor asks the court not to include it as part of your case. While you may be able to make arguments against this happening, you should understand that it is a possibility in your case.

What is an adversary proceeding, and how might it affect the outcome of my bankruptcy case?

Most individual consumers who file for bankruptcy list their unsecured debts, such as medical bills and credit cards, and the court discharges them at the conclusion of their case. Creditors can initiate an adversary proceeding, though.

A creditor who initiates such a proceeding may ask for an automatic stay in the case to continue collecting what their debtor owes them. If the judge okays this request, the debt may still be collected — but that is generally a rarity.

You have rights when filing bankruptcy

Much like any other legal case, you have rights when filing bankruptcy. You may have an opportunity to argue in front of the court why your creditor shouldn’t be allowed to request an automatic stay to continue collecting a debt. You may find that choosing an alternate bankruptcy to keep items and repay your debts is best instead. An attorney can help you sort out the pros and cons of making certain choices when seeking debt relief.

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