When someone challenges your bankruptcy, there can be a whole other component to your bankruptcy filing:  a lawsuit, under the umbrella of your bankruptcy petition.

Sometimes it is a challenge to your case brought by the Office of the US Trustee.  Sometimes a creditor argues that you fraudulently incurred a debt.  Sometimes it is a disgruntled, angry, vengeful former spouse.

I. Objections by the Trustee

The US Trustee may object to your discharge if you fail to fully disclose ALL assets, no matter how trivial (and no matter how nonsensical the Trustee's argument may be).  Consider this true to life example:

In a recent 2008 case, the Trustee moved to revoke the discharge of a single, impoverished, divorced woman.  The Trustee's actions were based on nonsense from her abusive ex-husband, but the staff attorney for the U.S. Trustee's Office refused to back off.  Following trial, the bankruptcy court entered judgment on behalf of the client and the firm prevailed.  This client preserved her right to walk away from tens of thousands of dollars of debt. 

The Trustee might object for other reasons including, but not limited to, "substantial abuse" or a disagreement over how your means test mathematical calculations were completed.  In some instances, case law is developing nationwide over the exact manner in which means tests deductions are taken.  For instance, are you entitled to deduct all of your secured debt (for instance, your mortgage payments) if you intend to surrender your house back to the creditor?  The issues are complex and vary widely across different bankruptcy cases.

Substantial use of credit cards in the 90 days prior to your bankruptcy filing may create a "presumption" of fraud - meaning you didn't intend to repay the debt and were planning to file bankruptcy all along.  A creditor can file an adversary proceeding (lawsuit) in your bankruptcy to have the charges ruled to be non-dischargeable - meaning you'd have to pay those charges despite filing bankruptcy.

A creditor can also object on any number of grounds under 11 U.S.C. 523 besides fraud.  For example, an objection might center on the filing of a false financial statement in order to get the credit account to begin with.  Other aggrieved parties may object based on a breach of fiduciary duty.

III. Divorce Obligations

Debts assigned to you in a divorce proceeding are usually non-dischargeable in a Chapter 7 bankruptcy specifically in relation to your obligation to protect your former spouse from the debts but they usually are dischargeable in a Chapter 13 bankruptcy.  If you have substantial divorce related debt, this may be a compelling reason to file a Chapter 13 bankruptcy instead of opting for a Chapter 7 bankruptcy.

These issues and more most be explored prior to your bankruptcy filing.  Whatever the reason for the objection to your case, your interests are not best served by an attorney who has never set foot in a courtroom.  Can your Denver bankruptcy attorney handle a challenge to your case, if necessary?  It's a fair question.

Although personal, prompt, professional service is the reason our past clients refer their friends and families to us, over 20 years of trial experience protects you from unpredictable scenarios that can threaten the success of your bankruptcy.