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Potential Pitfalls in Filing Chapter 7The debtors purpose in using Chapter 7 is to get debt discharges as many as he or sh...
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San Antonio Bankruptcy Attorney - Chapter 7 Bankruptcy


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Bankruptcy is a way to eliminate debts that you can no longer pay back. This allows one to start over again with a clean slate so that they can become financially solvent once again. This information is not legal advice. If you need a lawyer, I hear the Law Offices of Martin Seidler, 11107 Wurzbach, One Elm Place, Suite 504, San Antonio, TX 78230, know bankruptcy better than anyone in that city.

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San Antonio Bankruptcy Attorney - Chapter 7 Bankruptcy

  1. 1. Potential Pitfalls in Filing Chapter 7The debtors purpose in using Chapter 7 is to get debt discharges as many as he or she can.The universal rule is that any created debt prior to the bankruptcy filing is discharged.Bankruptcy discharge wipes out a persons liability on a debt or claim. However, it isimportant to note that although a persons liability can be discharged, most liens are notaffected by bankruptcy.The universal rule that all debts will be discharged has a few but very important exceptions.For instance, a creditor can seek to contest a debt discharge using the provisions of 11U.S.C. 523. The creditor can claim that the debt was obtained by fraudulent representationor other forms of dishonesty. If the debt is not discharged, the debtor would remain liablefor paying the creditor; apparently, this will have an effect on the debtors purpose in filingChapter 7, which is to get a financial fresh start.When the debtors financial obligations have become extremely burdensome, BankruptcyCode discharges debts, but it also gives some special exemptions to make sure that thisalleviation is provided only to the "honest but unfortunate debtor." There are debts thatsurvive bankruptcy from discharge under 523. These are divided into two sections: non-dischargeable debts due to the debtors misconduct and non-dischargeable debts due topublic policy.The non-dischargeable debts due to the debtors unlawful conduct include those incurred bydeliberate tort, theft, fraud, scam, drunken driving, and fiduciary breach. The non-dischargeable debts due to public policy include educational loan, child support, alimony,customs duties and taxes, government fines, penalties, and forfeitures, unscheduled claims,and certain debts that survive a preceding bankruptcy case. Any claim that falls within oneof these exceptions are not dischargeable.There are potential problems that can take place with debts such as a credit card debt since523 also has a provision that certain debt created from obtaining luxury services or itemswithin 40 days prior to filing a Chapter 7 is not dischargeable. Moreover, under fraudexception, there are certain credit card debts that have been found by the courts to be non-dischargeable because using a credit card implies that the debtor intends and can pay forthe services and goods charged.Aside from creditors pursuant to 523, the pursuant of U.S.C. 727 by a creditor or thetrustee may result a court’s disapproval of a final discharge in a San Antonio bankruptcy,regardless of its nature, if the debtor fails to sufficiently explain how any asset was lost,disobeys court orders, withholds estate records, any action or forbearing of action in orderto obtain an advantage, intentionally makes an untrue claim, oath, or account in abankruptcy case, fails to preserve or falsifies financial records, and conceals or destroys hisproperty after filing Chapter 7 or within the period of one year before the date of filing, inorder to defraud or hinder a creditor. Lastly, a Chapter 7 case may be dismissed by thecourt due to the debtors unscheduled claims, unpaid required payments or fees, orunreasonable delays of the proceedings. For more information contact a San AntonioBankruptcy Attorney.