In every case, the debtor is required to attend a Meeting of Creditors, also called a 341(A) Hearing. At the hearing, the trustee asks the debtor questions with regard to their financial situation and their petition. A creditor may attend the hearing and ask the debtor questions. Typically, the creditor’s questions must be restricted to a reasonable time period. In the event that the creditor wishes to ask additional questions, the creditor has a right to require the debtor to submit to additional questioning. This process is named a “2004 hearing” or “deposition”. The deposition takes place at either the debtors or creditors attorney’s office. The creditor may require the debtor to submit documents to the creditor for review. Also, the creditor may require that the debtor answer questions listed on paper. It is unusual for a creditor to pursue any information by any means other than the Meeting of Creditors.

Chapter 7

A creditor may object to the court’s granting of the debtor’s discharge, by filing the appropriate Chapter 7 documents with the bankruptcy court. Typically, the reasons for the objection may include, but are not limited to the following: fraud; false statement under oath; conceal property of the bankruptcy estate; withholding information; debtor’s failure to cooperate; etc. It is unusual for a creditor to pursue such an action.

A creditor may object to the elimination of debt that is due to that particular creditor. Under this scenario, the creditor must file with the court an Adversary Complaint called, “Complaint for the Nondischargeability of Debt.”Nondischargeability” means the debt may not be eliminated. In this scenario, the creditor alleges that the debtor committed fraud with regard to incurring the debt to that particular creditor. The court considers the facts as to whether the debtor intended to pay the debt at the time of the charge. The facts that are relevant in proving fraud, include, but are not limited to the following:

• whether the item purchased was luxury or necessary
• debtors’ income and expenses at the time of the purchase
• the amount of the charge
• how soon prior to the bankruptcy filing, was the item purchased
• how many payments were made.

$600.00 of consumer debt incurred in connection with one creditor, within ninety (90) days before the bankruptcy filing is presumed to be “nondischargeable”. Also, cash advances in excess of $750.00 that were incurred within seventy (70) days prior to the bankruptcy filing is presumed to be “nondischargeable”. A presumption of “nondischargeability” does not mean that the debt was incurred by fraud, but rather that it will be easier for the creditor to prove fraud. Any and all of the creditor’s objections to discharge, must be filed within the required time period.

If the trustee determines there is unexempt property of the bankruptcy estate, including money, that will be disbursed to the creditors, each creditor may file a “Proof of Claim” with the Court. The “Proof of Claim” reflects the name, address of the creditor and the amount that the creditor believes is due. Also, the Proof of Claim should include a classification of the debt, i.e., secured, general unsecured, or priority. Pursuant to the court rules, the balance due reflected on the Proof of Claim is accurate. However, a debtor may object to the claim.

Chapter 13

A creditor may object to a chapter 13 bankruptcy case for various reasons, such as: fraud; case filed in bad faith; and, bankruptcy plan is not feasible. Also, a creditor may object to the debtor’s chapter 13 bankruptcy plan (debtor’s monthly payments and the amount to be paid to each creditor), for various reasons, such as:

• non payment to creditor
• insufficient payment to creditor
• debtor is unable to make the required plan payments

Typically, if a Chapter 13 creditor is not satisfied with the amount that will be distributed to that particular creditor, under the debtor’s plan, the creditor will object to the plan. For example, a creditor will object if the debtor’s plan indicates mortgage arrears of $20,000 and the mortgage company believes that the arrears are $30,000.

Contacting a Bankruptcy Attorney in New Jersey

If you are facing a financial difficulties, you need to consult an attorney that is familiar with New Jersey bankruptcy laws. Attorney Robert Manchel has represented thousands of people with bankruptcy protection and foreclosure resolutions. For a free, confidential consultation, contact us online or call us at 866.503.5655.