Non-Dischargeable Debt Specialist Christopher German a Denver Bankruptcy Firm
An experienced Denver bankruptcy lawyer, Christopher German will specifically advise you as to which debts you can discharge under the Bankruptcy Code.
Debts that survive bankruptcy without the need for a creditor to file an objection include the following:
- Priority Taxes – A tax debt will be non-dischargeable if a tax return was not filed at all or filed two years or less prior to the bankruptcy filing date, and/or if the tax year is not three years or more previous. An IRS Assessment needs to have occurred over 240 days prior to the filing date. Payroll, employment and property taxes are non-dischargeable
- Debts Not Listed – An unlisted debt typically results in a creditor not receiving notice of the bankruptcy case. As such, an unlisted creditor is not enjoined by the Automatic Stay provisions prohibiting any collection activity in either chapter 7 or chapter 13. (The one exception is this rule – at least in Colorado – is that unlisted debts can be discharged in a “no asset” chapter 7 because there’s no non-exempt property for the trustee to distribute to unsecured creditors.)
- Domestic Support Obligations – Examples are child support or spousal maintenance but property settlement awards or other orders in a divorce decree may be discharged in chapter 13
- Government Penalties and Fines – Assessed as a penalty as opposed to compensation for monetary loss
- Student Loans – Unless the debtor qualifies for the difficult standard of “Economic Hardship” (e.g. permanent disability without the possibility of ever paying back the student loans)
- Injuries or Death Due to Influence of Drugs or Alcohol – This section does not include liability for property damage, which can be discharged
- Criminal Restitution Awarded in Federal Court
- Conversely, a creditor needs to either file an Adversary Proceeding or object to discharge of the following debts in Colorado Bankruptcy Court
- Fraudulently Incurred Debt – A creditor establishing that it justifiably relied upon the debtor’s fraudulent misrepresentation of a material fact resulting in injury establishes a presumption of fraud, which can be rebutted by the debtor by showing that no fraud took place
The majority of creditor objections based on Fraudulently incurred debt concern one of the two following situations in which no showing of fraudulent intent is required: (1) within 90 days of the filing, the debtor(s) incurred over $550 for luxury goods or services from a single creditor (medical bills incurred will overcome this fraud presumption), or within 70 days of the filing, the debtor(s) received a cash advance of over $825 from a single creditor
- Debts Resulting from Larceny, Embezzlement or Breach of Fiduciary Duty – Creditor claims on this ground almost always come from shareholders, partners or creditors litigating with one another in the context of a failed business
- Debts Resulting from Willful or Malicious Conduct – this does not include negligent behavior
The chapter 7 will proceed even if the creditor files an Objection to Discharge and/or an Adversary Proceeding regarding the particular debt at issue. Such objections typically needs to be filed within 60 days of the Meeting of Creditors, unless the creditor can show that it was not properly notified of the filing.
A creditor objection in a chapter 13 may prevent confirmation of the plan if not resolved in a timely manner. For this reason, a creditor will usually file a written objection (and a Proof of Claim), even for Section 523 debts which automatically survive the bankruptcy, in order to preserve its claim – and a right to part of the monthly plan payments. If the creditor’s objection is successful, the debt plus interest will be non-dischargeable.
The Law Office of Christopher German will advise you of your rights when dealing creditors who object to discharge. Christopher German will fight to ensure that you discharge as much debt as possible.