Can credit card companies or banks take away your right to file for Bankruptcy?
Creditors cannot prevent you from filing bankruptcy. Banks cannot prevent you from filing bankruptcy. Contracts that contain clauses that say the parties are prevented from filing bankruptcy are not valid.
Creditors can dispute that their debt can be discharged in your bankruptcy. The Creditor must be proactive and file a ‘complaint’ within 60 days of the date of your original creditor's meeting, government entities have longer. This type of dispute does not affect any other debts in your case. Usually, creditors claim you acted fraudulently when you obtained credit or services. The creditor must file the complaint timely or lose the right to file it. The bankruptcy rules are there so the “honest but unfortunate debtor” gains relief from their debt. There is no protection for a debtor who acted fraudulently.
Creditors and the U.S. Trustee can object to the discharge of all of your debts based on fraud committed by you in connection with your chapter 7 bankruptcy. For instance, if your provided false information on your bankruptcy petition or schedules, transferred the title or property to another person to avoid including it in your petition, or you lie to the bankruptcy trustee or judge during hearings, you are committing fraud.
Creditors, the Chapter 13 Trustee or the U.S. Trustee may also object to the discharge of all of your debts if you fail to keep and produce adequate financial records, do not disclose, hide, or destroy assets or you fail to obey a lawful order of the bankruptcy court, for instance, you fail to file all the required documents in your case.
A creditor has the right to demand repayment if you purchased a large ticket item, like a refrigerator, or charged a vacation on a credit card, within three months of filing your petition. A creditor’s claim for payment can come as a surprise. To prevent this type of surprise one of our common intake questions is to ask our clients if they have made any large purchases or taken recent vacations so we can explain the consequences before the bankruptcy is filed.
In the twenty years of practice, only a few clients have faced creditor opposition. We do our best to ferret out information necessary to determine the possibility of opposition. If a client does face opposition, our office will fight for them.
Fighting creditors mean an additional separate agreement and payment for services. As mentioned previously, we do our best to ferret out information that may lead to these types of situations to avoid surprises and make the lives of clients a whole lot easier in or out of court.