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What to Know About Chapter 7 Adversarial Actions

10 February 2022 by Kenneth Pierce

Financial relief cannot come fast enough for most chapter 7 bankruptcy filers. It's easy to understand why filers are so eager for their case to be over and all their debt to be discharged. However, almost any type of legal case, which a chapter 7 filing is, can face delays from time to time. When any of the below things happen, filers should remain optimistic and take things in stride. To find out more, read on. 

Know the Parties

When it comes to chapter 7 bankruptcies, multiple parties can be involved. The federal government oversees bankruptcy cases and appoints a trustee to work on its behalf. Then you have the creditors listed on your bankruptcy paperwork. All of them have a stake in what happens during the case. Almost all adversarial actions are brought about by either the trustee or a creditor during the bankruptcy process.

The Creditor's Meeting

During bankruptcy, this particular action was traditionally the opportunity for creditors who objected to the discharge of a debt to come forward and object. While that can happen, it may not necessarily happen at the meeting. In some cases, creditors can file an objection by doing so with the bankruptcy court and trustee. Your bankruptcy lawyer, whether the creditor appears at the meeting or does so using a court filing, will help you address any issues brought forward. In many cases, the creditor is objecting to the following issues:

• The filer made false claims of income when applying for the credit. This only happens rarely, though.
• The filer took out a lot of cash advances just prior to filing for bankruptcy. Filers are limited in how much money they can take out using cash advances before they file.
• The filer used available credit to charge a large dollar amount of purchases right before they filed. While filers are allowed to continue using their credit up to the time they file, they must be ready to show that the use was not for frivolous reasons.

Trustee Objections

Your bankruptcy trustee must oversee your case to ensure that any of the filer's personal assets that can be used to pay some of the costs of bankruptcy are identified. That might mean digging into some pre-filing transactions to identify any property that may be subject to seizure. Trustees can take back what they deem to be bankruptcy property if you sold, gave away, or otherwise disposed of any valuable property in the months prior to filing.

In most cases, the above issues are considered minor and can be resolved quickly. To find out more, speak to a company like Brooks Law Group.

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