While most people file for bankruptcy, attend their 341 Meeting of Creditors and receive a debt discharge with little interruption, there are instances in which a creditor could stand in your way. Often known as “challenges”, some creditors could make a case for why your debts should not be discharged.
The most common complaint made by creditors against your case is the recent use of a credit card to make purchases. Making credit purchases within the 90 days of filing for bankruptcy could be viewed as an attempt to defraud the system. Cash advances totaling $750 or more within the 70 days prior to filing are also a case for dispute. In either of these instances, the creditor can request that this portion of the debt be presumed to be nondischargeable; thereby, leaving you liable for repaying this amount.
Another common issue for complaint from creditors stems from luxury items. Creditors will often make more of a case for debt nondischargeability if there is an asset or luxury item tied to the debt. Those particularly liable are items purchased within the 90 days leading up to your filing. Since luxury items are not considered essential goods for living and maintaining the home, creditors often will make a greater case for debt repayment or the liquidation of these items, especially if they are not protected by bankruptcy exemption laws.
The best way to minimize creditor challenges is to avoid making purchases within the months leading up to your filing. Consult a Tampa bankruptcy lawyer about recent financial transactions and the potential for creditor challenges before filing your petition. Having adequate representation can help ensure your case is handled smoothly, and with little interruption.