Question about "sticky" on creditor objections.

[Kingxray]

I was reading the sticky regarding creditor objections and had a few questions.

1) Can only unsecured creditors object?

2) Do the same BK codes/conditons apply for creditors in a Chapter 13 case?

Thanks for your help.

[justbroke]

1) Can only unsecured creditors object?

There are basically two types of objection to discharge. First there is the objection to the specific creditor's claim being discharged upon the discharge of the debtor. In this case, only that specific creditor's claim would be non-dischargeable. The creditor would file a complaint (adversary proceeding) to determine dischargeability. If they are successful and win, then the claim is not discharged.

The second case is where the creditor objects to the entire bankruptcy and seeks to have your case dismissed for all claims. A creditor would do this if their claim is otherwise dischargeable, but they feel that you are fraudulently attempting to obtain a discharge.

Such a complaint can be filed by all creditors.

2) Do the same BK codes/conditons apply for creditors in a Chapter 13 case?

Yes. 11 USC 523, exceptions to discharge, work for Chapter 7 or Chapter 13. The real thing is, that most creditors don't complain about dischargeabilty in a Chapter 13, because they are likely to get "something".

[nceguyfromne]

I wouldn't worry at all

An unsecured creditor would only object to a discharge if you: 1) used fraudulent information when you originally applied for the account and they have proof, or 2) charged purchases either very close to (within 90 days of) when you filed, or after you filed. Otherwise, they have no grounds to object. I don't recall hearing any stories of creditors objecting to a discharge "just because," since the laws are pretty clear. I suppose a private party (i.e. friend or family member who loaned you money) might attempt this for personal/emotional reasons, but they would have no legal basis and their objection would be denied.

[justbroke]

Yep, the worse creditors are family and friends who do it just in spite. The smart creditors -- traditional creditors -- know that there are risks when you bring forth an 11 USC 523 dischargeability complaint and lose. The creditor could be taxed with the debtors fees and costs to defend!

I have read very few cases where a creditor tried to discharge the entire bankruptcy. There are many cases where a specific creditor attempts to have their specific claim deemed non-dischargeable.

Generally speaking, a creditor needs to way their likelihood of winning the complaint before actually filing one.

[Kingxray]

Thanks. Our situation is with a family member (my dad). His lawyer showed up at our prior 341's when we filed chapter 7. We have since converted to 13and our 341 has been continued until the end of this month.

My dad has a civil judgement against us. He also put a lien on our house prior to us filing. We are surrendering that house. When our lawyer converted us to a chapter 13 he included my dad's debt as a secured debt that we are surrendering, therefore he gets no money. This will infuriate him and I think he will want to object or at least sic his lawyer on us at our 341. At our last 341 his own lawyer stated it was a secured debt.

1) So is that debt considered secured or unsecured?
2) On what grounds could he object to?

Thanks as always.

[justbroke]

1) So is that debt considered secured or unsecured?

If he has a properly recorded lien on your real property, then it is a secured debt.

2) On what grounds could he object to?

If there's some actual fraud that he can prove, he can file a complaint to determine dischargeability and have the debt declared to be non-dischargeable, and may even have it granted administrative status whereby you have to pay it back in-plan.

[Kingxray]

If he has a properly recorded lien on your real property, then it is a secured debt.

Previously I had called the county to see if there was a lien on the house and indeed there was a lien placed by my dad. I'm not sure if that is considered "properly recorded".

If there's some actual fraud that he can prove, he can file a complaint to determine dischargeability and have the debt declared to be non-dischargeable, and may even have it granted administrative status whereby you have to pay it back in-plan.

No, fraud. We paid him back most of this loan over a period of 6-7 years. He wants the remaining plus interest and legal fees, which makes the amount impossible to pay. When he tried to garnish hubby's wages, that's when we filed.

What does administrative staus mean? Thanks so much for your imput.

[justbroke]

What does administrative staus mean? Thanks so much for your imput.

Administrative Priority means that it's paid at the same priority as the Trustee and your Attorney. It's the highest priority for paying creditors. In other words, he'd be paid before almost everyone else in the Chapter 13.