Included in Bankruptcy - what exactly does that mean?

[ellis2156]

I have noticed on my credit report that my some of my creditors that were sent BK notices have changed my accounts to $0 and included in bankruptcy. I have my 341 meeting tomorrow and was wondering if this would come up in the questioning. Does this mean that they are going along with the bankruptcy and will not file an objection?

[justbroke]

It is for reporting purposes only. It does not mean that they will not file a dischargeability complaint. Most creditors will immediately zero out your account and change the status to either "Included in Bankruptcy" (IIB) or "Wage Earner Plan" (WEP for Chapter 13/11). They do this to make sure they do not violate the automatic stay (or permanent discharge injunction).

Typically, creditors do not object to your discharge unless the value is significant AND they feel that your charges were non-dischargeable. Non-dischargeability could be proven if you made "luxury" purchases within 90-days of filing. The non-dischargeable amounts could also be for non-luxury purchase also made within 90-days of filing, like taking an expensive vacation. They could also say that you fraudulently obtained credit... by charging large amounts and not paying a single penny later. In any event, this type of complaint, of a creditor, happens in less than 5% of cases. ("Significant" is a term of art. It could be $2,000 or more, but the code lists luxury as $500 and cash advances over $750. This is really viewed on a per case basis. Not every creditor wants to fight over $500 and not every creditor will see "significant" as $4,000 or more.)