Question about creditors objections for any of you guru's

[Vikingfan]

Let's say you had 8 cc's with 4,000 dollar balances each and last activity on all the cards were 6 months ago. If you filed bk chapter 7, what would stop the creditors from objecting to every one of your accounts?

Obviously if you're judgement proof, it wouldn't make any sense for an objection, but if your not why wouldn't they just object to each acct? They have deep pockets to fight in court and we do not? I guess my line of thinking is that they would want to get "something" out of you vs "nothing". And everything I've read here, suggests that the trustee is basically representing the creditor and not "you".

I guess the reason I'm asking is because bk is the only relief for debtors to start fresh, while it seems like a creditor could really make life difficult for exercising your legal and federal right to do so.

Someone let me know if I am way off base here.

[CATCHMEIFYOUCAN]

Vikingfan

Let's say you had 8 cc's with 4,000 dollar balances each and last activity on all the cards were 6 months ago. If you filed bk chapter 7, what would stop the creditors from objecting to every one of your accounts?
It all depends on the creditor(s) whether it will be worth it for them to go after you, If you have no assets than there is no point in pursuing you. If the court cost/fees etc is worth it to go after you - they will.

Obviously if you're judgement proof, it wouldn't make any sense for an objection, but if your not why wouldn't they just object to each acct? They have deep pockets to fight in court and we do not? I guess my line of thinking is that they would want to get "something" out of you vs "nothing". And everything I've read here, suggests that the trustee is basically representing the creditor and not "you".
Right on that one, the Trustee is on the creditor side, and any disposable income you have he wants to help pay them back and give himself a little something (admin fees).

I guess the reason I'm asking is because bk is the only relief for debtors to start fresh, while it seems like a creditor could really make life difficult for exercising your legal and federal right to do so.
As I'm reading into Bk and the new laws the creditors really screwed themselves because they are getting less back than they would have with the old laws! Sometimes pennies on the dollar!

Someone let me know if I am way off base here.
No I don't think you are way off base. You figure your paying good money $2000-3000 to wipe out your credit if you can (through Ch7 THAT is). The system better work!

Catchmeifyoucan

[FilingOnMyOwn]

Its a bunch of different creditors you're dealing with tho, and they all have their own lending & collection criteria. Given that scenario, on average only one might object, for example. But most frequently none do.

[HHM]

You have to realize, creditors cannot simply object because they feel like it. They need to claim that the debt falls under an exception to discharge that is laid out in the BK Code. Being judgment proof or not has nothing to do with it. Generally speaking, the most common reason a creditor objects is for "recent" large activity. If you charged $3,000 on a credit card for a plasma TV and 2 months later filed for BK, that creditor is going to object to discharge and win.

[SamanthaJones]

NIce clarificationn, HHM. I have been asking myself, why doesn't every credit card company simply object, and claim any number of possible abuses? It must not be an easy process or they WOULD.

[Vikingfan]

Thanks all

Thanks HHM that helped me clear things up. knowing that there is some kind of code or statute that the creditor must go by before just arbitrarily objecting to everything.

[no_it_all]

Before a creditor files a non dischargeability action against a debtor they will evaluate the following:

What is the likelihood that the debtor will have assets or income in the future from which the claim could be paid, if the creditor was successful in excepting the debt from discharge?

Clearly, if the debtor used the money for some tangible asset like a TV the creditor might go for dischargeability. If the debtor used the money for regular living expenses (which is usually the case) there would be no point in pursuing action, since there would be nothing for the creditor to recover (assuming like most Chapter 7s it is a non-asset case).

As pointed out in previous posts, something else the creditor will evaluate is:
What are the costs of litigating the nondischargeability action?

To litigate for small amounts isn't really practical either. What would be the point? Of course trying to figure out what Chase Bank or Discover card consider a small amount and what you consider a small amount isn't always easy.

In addition and probably most important: Did the dishonest or malicious act create the debt or did it occur after the creditor extended credit?

Generally, to prevail, a creditor must show that but for the dishonest act, the debt would not have arisen. Lies about intent to repay the debt, made after the debt was incurred, usually won't support a non dischargeability action.

What all this means in English is that the courts generally favor a presumption of dischargeability for the debtor, and it is the creditor that has to prove their case.

[HHM]

And an FYI, the code section is Section 523 of the Bankruptcy Code that outlines the exceptions to discharge. The paragraph creditors use most in Objections to Discharge is 523(a)(2)