When a debtor files for bankruptcy he/she must list all creditors (i.e., the entities to which the debtor owes money).
There are some debts that automatically don’t get discharged, such as student loans, taxes (unless they are old enough and meet other criteria), child support, alimony, and a few others.
Most other general unsecured debts will be discharged unless a creditor thinks it has a good reason why the debt should not be discharged and decides to challenge the dischargeability of the debt.
For example, if the debtor took out large loans within the 2-3 months right before filing bankruptcy the creditor could ask that the debt not be discharged. Or if the creditor believes that the debtor took out a loan under false pretenses or fraudulently obtained the loan then the creditor could ask that that debt not be discharged.
But how does the creditor accomplish its goal of making the debt not dischargeable? It brings an Adversary Proceeding.
An Adversary Proceeding is like a mini lawsuit within the bankruptcy in which a creditor is asking the judge to rule on whether a specific debt will be discharged or not.
In an Adversary Proceeding, a Complaint is filed by the creditor asking that the debt not be discharged. The debtor has a chance to respond within a certain amount of time.
If the debtor does not respond, then the creditor will win on the issue and the debt will not be discharged. If the debtor does respond, then the issue will come before the judge and the judge will decide the issue based on the facts in the case.
Debtors with questions about Adversary Proceedings should speak with one of our experienced attorneys for more information. If you have questions about this topic or any pertaining to Bankruptcy, contact us at 913-422-0909. Or visit our website at: www.kansascitybankruptcy.com At WM Law, we are Here to Help!
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