Some claims made against a specific debtor survive discharge without any action on the part of the creditor. Examples include child support, student loans, criminal restitution, and drunk driving judgments. Only if the creditor acts quickly after the bankruptcy, do other claims survive.
Rolling stones don’t collect moss: By timely filing an action for non-dischargeability, a creditor whose claim against the debtor resulted from fraud, dishonesty, or other types of willful activities may contest the discharge of that claim in a Chapter 7 bankruptcy.
In bankruptcy jargon, this action is referred to as a “adversary proceeding.”
The creditor must demonstrate to the satisfaction of the court that the conditions for non-dischargeability have been met in order for the claim to survive bankruptcy. If the adversary procedure is not started within 60 days of the initial creditors’ meeting, the claim will not be dismissed. The notice of filing provided to all creditors when the bankruptcy is filed includes a deadline for filing.
In a bankruptcy notice, use these steps to find what you need.
If a motion to extend the deadline is submitted before the filing deadline, the deadline may be extended. When you submit a petition for non-discharge in bankruptcy court, the judgement for fraud you won against the debtor prior to filing for bankruptcy can already be decided. Even though you might not need to provide any additional evidence, you must nevertheless bring the nondischarge action. Whether the pre-bankruptcy decision is decisive may rely on whether the judgement contains findings of fact that are compatible with the standards for non-dischargeability in bankruptcy court.
The question of whether the expense of the adversarial process, the chances of success, and the chances of actually collecting the claim are worthwhile for the majority of creditors with claims that might not be dischargeable.