Law Office of Judith A. Descalso Law Office of Judith A. Descalso

When a creditor challenges a bankruptcy discharge

Many Escondido residents have been able to take advantage of the benefits of filing for bankruptcy over the years. They have been able to discharge debt, put an end to creditor harassment and gain a fresh start for their financial prospects. In many of these cases, the proceedings go smoothly and the whole ordeal is wrapped up within a matter of months. However, when a creditor challenges the discharge of a certain debt during the bankruptcy filing, the proceedings can screech to a grinding halt.

All types of creditors are thoroughly knowledgeable about the Chapter 7 bankruptcy process, and that is the risk they take on when they loan money to a debtor or approve a person for a credit card. So, why would a creditor challenge the discharge of a debt? The most common reason is a suspicion of fraud.

Take, for instance, a couple that knows that they have significant financial challenges, and that they may ultimately have to file for bankruptcy. But, what if that couple still has a few thousand dollars' worth of a credit limit on their credit cards, and despite the fact that they know they will be filing for bankruptcy they go out and spend up to those limits? This is a red flag, and could be labeled as bankruptcy fraud.

At our law firm, we know that there are certain valid reasons for a creditor to challenge a discharge of debt. But, we also attempt to work with our clients to ensure that they are taking the right steps in advance of a bankruptcy filing. To learn more about how our law firm attempts to help Escondido residents who are preparing to file for bankruptcy, please visit our website.

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