Often debt discharge is quite common for unsecured debts while availing relief during bankruptcy. However, it is important to note that the lenders will leave no stone unturned to get some or all of their money back. One of the most common ways of preventing discharge amongst the bankruptcy filers is to prove that the debt was facilitated by an act of fraud. If a bankruptcy filer provided any incorrect information while availing of unsecured debt, the applicant might be liable for the debt and other criminal procedures. The overall discharge of the debt in question shall be denied.
What is the time frame and who owes the burden of proof?
The lender is granted a 60-day window to produce proof to the bankruptcy court to support their claim that the debt has been availed by an act of fraud and should not be discharged. The burden of proof is on the lender and not the debtor, which means the lender has to file valid documents and supporting proof to indicate the unsecured debt was availed fraudulently. In case, the lender fails to provide any evidence supporting the claim, the unsecured debt will be discharged as per bankruptcy proceedings under Chapter 7. To maximize debt discharge under Chapter 7 or to know other alternatives, log on to https://recoverylawgroup.com/bankruptcy/.
What can be presented as proof of debt obtained fraudulently?
- Providing false information, like incorrect information details, address details, misleading documents to obtain credit
- Performed an identity theft and used another person’s date and identity to secure a credit
- Availing and using unsecured debt with an intention, not to payback
- Any act of fraud or intentional action to damage the property in question or the lender himself/herself
- The timing of availing the credit services holds significance in determining the intent of the credit
- Also, any misuse of funds like transfer of unsecured debt to friends & family or purchasing expensive gifts for friends & family using a credit card, etc.,
Defending yourself from these charges
As stated earlier, desperate creditors might go to any extent to recover whatever portion of the money they can. You might need a good bankruptcy lawyer to still defend your case, even if you are honest and clean. If you aren’t then probably it isn’t a good idea to apply for bankruptcy and maybe some walkarounds might be considered to ensure, you manage your debt a bit more comfortably. If you need any assistance or if you feel a need to assess your bankruptcy situation, do not hesitate to dial 888-297-6203 to connect with some of the best attorneys in Los Angeles & Dallas, TX.