- Posted by Dan
- On November 30, 2010
- 0 Comments
Most Chapter 7 cases proceed in a fairly rapid pace. In Knoxville, the bankruptcy discharge is usually granted within about 120 days of the actual filing of the case.
However, sometimes you get a lawsuit filed against you known as a Non-Dischargeability Complaint. So what is it and what should you as the Debtor do?
A Non-Dischargeability Complaint in a bankruptcy is a new lawsuit filed against the debtor asserting that a specific debt should not discharged. The case is filed allowed under the bankruptcy code. The five most common debts for which a Non-Dischargeability Complaint may be filed are:
- Debts arising from a domestic relations order (alimony, child support, etc)
- Debts arising from a DUI, including fines or penalties
- Debts arising from fraud (like misrepresentation or violation of the consumer protection act)
- Debts arising from taxes less than 3 year old
- Debts arising student loans
Understand that if the non-dischargeabilty complaint is filed and you do not defend it, then the court will most likely enter an order finding that you still owe the debt even if all your other debts are discharged.
Therefore, the first thing you should due if you receive the Summons and Complaint is contact an experienced bankruptcy attorney. The attorney that filed your case may not have been retained to defend this type of case. Since these lawsuits arise in only a small percentage of cases, the attorney likely did not collect a fee to defend this case.
You should not delay contacting a bankruptcy attorney. Normally, the Rules require you to file an answer to the lawsuit within 30 days. Remember, this is a separate lawsuit so be sure to hire an attorney who will litigate the case in court if necessary.
As the economy worsens, we are seeing more and more non-dischargeability lawsuits filed. However, the Bankruptcy Code favors the discharge of ALL debts. So you start with a preference for dischargeability. Don’t lose that by either not hiring an attorney or hiring an attorney who is not well versed in dischargeability litigation.