When someone files for bankruptcy in the United States, they may request a discharge of their debts, which means they are no longer legally obligated to repay certain debts. However, some debts cannot be discharged, and creditors have the right to object to the dischargeability of specific debts under certain circumstances. This legal action taken by a creditor is known as an objection to dischargeability, and it occurs within the context of bankruptcy proceedings.
The following are the most common reasons for objecting to the dischargeability of a debt:
- Fraud: If the debtor obtained the debt through fraudulent means or misrepresentation, the creditor may object to the discharge.
- False Financial Statements: If the debtor provided false financial information or statements when applying for the loan, the creditor may argue that the debt should not be discharged.
- Embezzlement or Theft: If the debt arises from embezzlement, larceny, or any other form of theft or misappropriation of funds, it may not be dischargeable.
- Willful and Malicious Injury: Debts resulting from willful and malicious injury to another person or their property may be non-dischargeable.
- Government Fines and Penalties: Certain fines and penalties owed to governmental units may not be dischargeable.
- Domestic Support Obligations: Debts related to alimony, child support, or other domestic support obligations are usually non-dischargeable.
The objection to dischargeability is typically filed within a specific timeframe with the bankruptcy court. During a hearing, both the debtor and creditor can present evidence and arguments to support their positions.
