Common Bankruptcy Questions
The most common bankruptcy questions relate to qualification for discharge, because the elimination of debt is the common goal of all debtors who file. A discharge eliminates a debt as if it never existed. Also be aware that a discharge of a debt is available in both Chapter 7 and Chapter 13. In Chapter 13, plans may provide either full or partial payment. In partial payment plans the unpaid debt remaining at the end of the plan term is discharged similarly as in Chapter 7 cases. Laws that provide for the terms of a discharge are highly technical and provide fertile ground for bankruptcy questions, disputes and litigation:
How Disputed Bankruptcy Questions Are Resolved by U.S. Courts
One of the most problematic bankruptcy questions always turns on the classes of debts that may be eliminated. For instances, a loan obtained by fraud is not dischargeable. However, the existence of actual fraud requires proof of each element of a cause of action to sustain a finding of fraud which requires conforming factual evidence. In essence, an objection to discharge frequently results in an adversary proceeding which is similar to a lawsuit within a lawsuit, and as everyone knows, court interpretation of testimony is not an exact science. Most allegations of fraud are highly contested and the final result speculative. This uncertainty in determining the existence of fraud then impacts the availability of discharge depending upon the final judgment obtained within an adversary proceeding.
Similarly, the weight and importance assigned to evidence in all disputes creates a degree of uncertainty in all objections filed by creditors. For debtors who have bankruptcy questions about dischargeability, the answer depends on factual circumstances, the likelihood of proof, and the practical economic prospect of contest (i.e., does filing an objection create a probability of profitable recovery for a creditor?). For more specific information, see:
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