Bankrutpcy Discharge in Chicago

Whether filing for Chapter 7 or Chapter 13 bankruptcy, the goal of every filer is to receive a bankruptcy discharge.  The discharge is the court order which frees the person filing for bankruptcy protection from the the legal liability and responsibility for their debts.  One of the more difficult parts about filing for bankruptcy protection is determining which debts can be discharged, which debts are non-dischargeable and which debts fall into a grey area and are questionably dischargeable.

Some debts are always non-dischargeable, regardless of the bankruptcy chapter that you file.  Items such as past due child support, criminal fines and restitution and recent tax liability are examples.  Some debts may be dischargeable in certain circumstances if your bankruptcy lawyer files an action, known as an adversary, to make it dischargeable.  One of the most common, and most difficult to win, is attempting to discharge student loans or tuition. 

Still other debts are dischargeable unless the creditor files an objection to their being discharged.  The objection to discharge would have to be filed by the creditor, which is the party to whom the monies are owed, and would have to state a specific reason for the debt to be determined non-dischargeable.  Common examples of these actions include recent usage on a credit card or loans taken immediately prior to filing for bankruptcy, accusations of fraud and accusations of willful and malicious injury to another party.  These objections, when brought, must be litigated in front of the bankruptcy judge assigned to the case.

In a recent case originating from the Chicago Bankruptcy Court, the United States Court of Appeals for the Seventh Circuit made a nonprecedential disposition that upheld the decision of Chicago Bankruptcy Judge Pamela S. Hollis.  Judge Hollis stated in her holding that debts obtained with teh aid of verbal misrepresentations are dischargeable if the statements of the person filing the bankruptcy are about general financial condition.  Of the next quetion to follow this ruling is "what is a statement regarding general financial condition?" and "what is a statement that could be viewed as fraud?".  These are questions that have to be examined based on the specific facts of each situation.

Filing for bankruptcy protection to alleviate the stress of debt can backfire on you if, after all of the preparation, work and expense of filing, your debts are deemed to be non-dischargeable.  The experienced and qualified bankruptcy attorneys at Ledford & Wu are happy to offer you a free consultation to ensure that you understand which of your debts are dischargeable, which are non-dischargeable and which may draw an objection.

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