Dischargeability Proceedings; You've Been Sued in Bankruptcy
From the moment you filed bankruptcy, your creditors were legally forced to cease all collection efforts against you. Now, you've probably sailed past your Section 341(a) Meeting of Creditors with the trustee when all of a sudden you're served a Notice and Summons in your bankruptcy case. You're being sued!
Keep in mind that a discharge of your debts voids any judgment at any time obtained. It also operates as a permanent injunction against the commencement or continuation of an action to collect on any debt as a personal liability of yours and any community property, if you're married. The failure by creditors to raise a non-dischargeability and discharge objection issues timely will forever bar them when your discharge is issued. There are two types of objections:
The first type is where the creditor or trustee objects to the discharge of all debts under 11 U.S.C. §727. This adversary complaint must be based upon proof that you, the debtor, fraudulently transferred or concealed property; failure to keep or preserve books or records; made a false oath or account; or failed to explain loss of assets or insolvency.
The second is where a creditor objects to the debtor's right to receive a discharge of a particular debt rather than the entire case and can be found in 11 U.S.C. §523. Some of the more common grounds for objecting to the discharge of certain debts are if those debts were obtained by false pretense or actual fraud; making false financial statements to obtain debt; embezzlement or larceny; willful or malicious injury; or for fraud or defalcation while acting in a fiduciary capacity.
If you're issued a notice and summons during your bankruptcy case; don't panic. Call your bankruptcy attorney and they will either handle the case for you and explain your rights, or make a referral to a colleague who handles these types of cases. Don't delay because you only have 30 days to respond or the plaintiff could get a default judgment against you.
