LAWDOG BANKRUPTCY: CHAPTER 13

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Under certain specific and limited circumstances described in the Bankruptcy Code, a creditor may file appropriate and timely action to object to the discharge of a specific debt. The exceptions to discharge are generally prescribed under Bankruptcy Code Section 523. See Section 523 of the Bankrutpcy Code reproduced here for illustration purposes only. A Chapter 13 discharge generally may relieve the debtor of all obligations provided for in the plan except certain long term debts, certain support obligations, nondischargeable student loans, or liability arising from an automobile accident involving drugs or alcohol, or for restitution, or a criminal fine, included in a sentence on the debtor's conviction of a crime. See Section 1328 (a), reproduced here for illustration purposes only.

If the debtor has fulfilled the plan, most debts are dischargeable in a Chapter 13 discharge. If the plan has not been completely fulfilled, then a "hardship discharge" may be ordered. If this hardship discharge is granted, creditors may be permitted to seek a determination of dischargeability for debts that would have been nondischargeable in a Chapter 7. Similar considerations may apply where a case has been converted from a Chapter 13 to a Chapter 7 Bankruptcy.

In addition to non-dischargeability of particular claims, the Court may deny discharge for certain reasons, including fraud, concealment of property, making a false oath, presenting false claims, destroying, concealing, or falsifying documents or records concerning the debtor's financial condition, or disobeying any lawful order of the court. See Section 727 reproduced here for illustration purposes only.

A creditor who wishes to obtain a determination of the dischargeability of a debt should consult legal counsel immediately upon learning of the filing of a bankruptcy. Appropriate motions or complaints must be filed within the statutory time period, or the right to do so may be forever barred. Actual cases should be discussed with your actual legal advisor or legal department.

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