Why a Creditor Might File an Objection to Discharge in Bankruptcy

A court might grant a creditor's challenge to your debt discharge if it appears that you engaged in fraud.

Updated by , Attorney · University of the Pacific McGeorge School of Law

When you file for bankruptcy, all creditors listed in your petition receive notice of your case. Not only can creditors question you at the meeting of creditors or 341 hearing, but they can object to your discharge under certain circumstances. Read on to learn more about why a creditor might file an objection to your discharge.

What Is an Objection to Discharge?

A bankruptcy discharge eliminates your obligation to pay back qualifying debts, such as credit card balances, medical bills, and personal loans. However, some debts, such as alimony, child support, and recent tax obligations, can't be wiped out in bankruptcy. These types of debt are considered nondischargeable.

The bankruptcy court also can deny the discharge of a debt that would normally be dischargeable when certain conditions are met. A creditor has 60 days from the initial date set for your meeting of creditors to file an objection to your discharge.

Learn more in What is an Objection to Discharge in Bankruptcy?

Reasons a Creditor Might Object to Your Discharge

If you lie on your bankruptcy papers or abuse the bankruptcy system, the bankruptcy trustee might ask the court to deny your entire discharge. In that case, none of your debts would get wiped out.

Most creditors, however, are only interested in their debt, and they'll ask the court to find their debt dischargeable only. The following are common reasons a creditor might file an objection to your discharge.

You Bought Luxury Items on Credit Before Bankruptcy

If you bought luxury items—things that aren't necessary to support yourself or your dependents, such as vacations or expensive electronics—totaling over $800 from a single creditor within 90 days of filing for bankruptcy, the debt is presumed to be nondischargeable (figures valid for cases filed between April 1, 2022, and March 31, 2025). (11 U.S.C. § 523(a)(2)(C)(i)(l).)

The presumption of fraud shifts the burden to you to prove that you're entitled to a debt discharge because it was a necessary expense and not a luxury good or service.

You Took Cash Advances Before Filing for Bankruptcy

Cash advances from a credit card or other consumer credit plan totaling over $1,100 and taken out during the 70 days before your bankruptcy filing are presumed to be nondischargeable, as well (figures valid for cases filed between April 1, 2022, and March 31, 2025).

You Incurred Debts Through Fraud, False Pretenses, or Misrepresentation

Fraudulent debts aren't dischargeable in bankruptcy. If you lied on a loan application or otherwise used fraud, false pretenses, or misrepresentation to obtain credit, the creditor will likely have grounds to object to your discharge.

Common types of fraud include misrepresenting income on credit applications and purchasing things on credit with no intention to pay back the debt.

You Used Your Credit Card to Pay a Nondischargeable Debt

It might be tempting to use a credit card to pay off a nondischargeable debt, such as a student loan or recently incurred taxes, and then wipe out the credit card debt in bankruptcy. But generally, it's not allowed.

In Chapter 7 bankruptcy, those types of debt transfers aren't dischargeable. However, you might be able to discharge a credit card balance you incurred when paying off a tax debt in Chapter 13 bankruptcy.

Learn more about debts discharged in Chapter 13 but not Chapter 7.

You Committed Fraud in Your Bankruptcy Case or Abused the Bankruptcy System

If you hide assets, lie on your bankruptcy papers, file for bankruptcy solely to delay creditors, or otherwise abuse the bankruptcy system, the bankruptcy trustee can ask the court to deny you a discharge for all your debts. Committing bankruptcy fraud is a serious offense that can result in the loss of your discharge, fines, or even imprisonment.

For more information, see Bad Faith Filing in Bankruptcy Cases.

Updated April 23, 2022

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