When you file for bankruptcy, you are required to notify all of your creditors. This gives your creditors the opportunity to challenge your bankruptcy filing - they might argue that you shouldn’t be allowed to file bankruptcy at all, or they might have an issue with some particular aspect of your bankruptcy. As intimidating as this may sound, the reality is that you will be given an opportunity to respond to their challenges, and ultimately, the court will decide whether or not you should be allowed to proceed. It may still sound scary, but rest assured that the playing field while in bankruptcy is much more level than it was before you filed for bankruptcy. If you’re worried about possible objections to your bankruptcy case, a Minnesota bankruptcy attorney can help you both avoid and respond to those objections.
Everyone Gets Their Day in Court
The most fundamental thing you need to understand is that you will have an opportunity to be heard. If a creditor challenges your bankruptcy filing, you have the right to demand a hearing before the bankruptcy judge. You will have the opportunity to defend yourself and explain why your actions. Just because one of your creditors has filed an objection, doesn’t mean that they will prevail.
You Have an Attorney, Right?
That said, your creditors will be represented by counsel, who will use their experience and knowledge of the law to their advantage. If you don’t have a lawyer and are representing yourself in your bankruptcy, you are at a disadvantage. An experienced bankruptcy attorney will know how to respond to these challenges and know which arguments the court is likely to find persuasive. Your bankruptcy attorney will also know your creditors may have a valid point, and how you can resolve the challenge to their satisfaction without jeopardizing your case.
More important than what they know is your attorney’s ethical obligations to act solely in your best interest. To put it another way, your attorney isn’t neutral, they are completely on your side. As an aside, it’s important to hire a Minnesota bankruptcy attorney because they will know the law and procedural rules to help you overcome potential objections.
Understand the Role of the Trustee
When you file for bankruptcy, all of your assets and debts go into what is referred to as the “bankruptcy estate.” The trustee’s primary role is to oversee the administration of the bankruptcy estate for the sake of satisfying your creditor’s claims. This may sound like the bankruptcy trustee is completely on the side of your creditors, but this is not entirely the case.
- The bankruptcy trustee has a duty to all parties involved in the bankruptcy case to ensure that the estate is administered fairly and in compliance with the law. This obligation, to a certain extent, extends to the debtor.
- The trustee is, more-or-less, required to treat all of your creditors equally. As a result, the trustee cannot grant one trustee an advantage over another.
While the trustee’s role is more complicated than the summary above, the point is that the trustee plays a more neutral role than you may have thought.
Understand the Role of the Judge
While the trustee’s role in your case is somewhat neutral, their primary obligation is to the creditors. The bankruptcy judge, on the other hand, is supposed to be totally neutral. This can be a source of consolidation if you are heading to a hearing on a particular objection - the judge should listen to both sides of the argument and apply the law impartially.
That said, the judge does not represent you and cannot give you legal advice. Engaging a Minnesota bankruptcy attorney is the best way to ensure that the judge will give you a fair hearing.
Common Challenges to Consumer Bankruptcy
In order to provide some additional context, it may be helpful to review some of the common challenges filed by creditors in a bankruptcy case. Most of these challenges are centered on the issue of whether you should be able to receive a discharge of a particular debt. Here are some common reasons why a creditor may object to their debt being discharged:
- You bought luxury items on credit 90 days prior to filing for bankruptcy.
- You took out a cash advance on your credit card 70 days prior to filing for bankruptcy.
- Your debts are the result of fraud or misrepresentation.
- You incurred a dischargeable debt in order paid a nondischargeable debt (for example, you paid off your student loans with a credit card).
As mentioned above, you will have an opportunity to respond to these objections. Your attorney can give you advice as to the best course of action and respond on your behalf. More than likely, the trustee may have an opinion on the objection - they can also choose to support or oppose the objection, and your attorney may be able to discuss this with them. In the event that it can’t be resolved prior to trial, the judge will then preside over a hearing and determine whether the creditor’s objection should be granted or denied.
Kain & Scott - Minnesota Bankruptcy Attorneys Helping Consumers Get a Fair Result
Bankruptcy can be an intimidating process for non-lawyers, and especially so when facing objections from aggressive creditors. At Kain & Scott, we give our clients dedicated representation throughout the entire bankruptcy process to ensure that you get a fair outcome. Don’t leave your financial future in the hands of your creditors - contact Kain & Scott to set up a free consultation. Call us at 800-551-3292 or contact us online to discuss how we can help you.
