Portland Bankruptcy Attorney

Bankruptcy Lawyer Portland Or

Portland Bankruptcy Attorney
CALL 503-380-7822
email-iconmap-marker
  • Home
  • Bankruptcy
    • Personal Bankruptcy
    • Business Bankruptcy
    • Zero Down Bankruptcy
    • Foreclosure
    • Chapter 7 Bankruptcy
    • Chapter 13 Bankruptcy
  • Estate Planning
  • About
  • Contact

Two Separate and Distinct Lists of Debts Which Are Not Written Off in Bankruptcy

September 27, 2012 by Chris Kane

Most debts ARE written off in bankruptcy. But there are two very different sets of debts which aren’t. To understand bankruptcy it helps to understand the difference between these two.

In our last blog we wrote about debts which are not discharged—written off in bankruptcy—IF AND ONLY IF a creditor objects by a strict deadline, AND persuades the bankruptcy judge that the debt should not be discharged. To do this the creditor has to show that the debtor acted in some specific bad way in relation to that debt. There’s a list of the specific bad ways in bankruptcy law.

But in that blog we mentioned that there is ANOTHER set of debts that are not discharged EVEN WITHOUT the creditor raising an objection.  The different way that these two sets of debts are treated can be confusing.

Some of our clients are concerned that a certain creditor or two will raise an objection. So they breathe a sigh of relief when the deadline for creditors to file a complaint at the bankruptcy court passes without hearing from any creditors. But that deadline—which is usually about three months after a bankruptcy is filed—only applies to the first set of debts—the kind which can be challenged because of a debtor’s bad behavior related to the debt. These include the debtor defrauding the creditor, abusing a trust relationship, embezzling or stealing, or injuring someone or their property intentionally and maliciously. It can also edge into behavior that might be considered more reckless than intentional, like bouncing checks and using a credit card when unable to pay on it.

But the second set of debts, the ones that aren’t discharged even if the creditor does not raise an objection, do not involve bad behavior by the debtor. Rather these kinds of debts are ones that Congress has decided just shouldn’t be able to be discharged in bankruptcy. So the creditor doesn’t need to complain or object. The debt is just simply not discharged, and the debtor continues to owe it after the bankruptcy is finished. These include the familiar ones that most people have heard of: child and spousal support, most student loans, and relatively recent income taxes.

This gets interesting because the rules about which debts are included in the second set of debts (the ones which aren’t discharged without a creditor’s objection) can get quite complicated. So sometimes it’s not perfectly clear whether a particular debt does or does not fit the rules laid out in the Bankruptcy Code. So it’s not clear whether or not that debt is discharged in bankruptcy. For example, whether or not a particular income tax is discharged can turn on half-dozen or more considerations (including how long since the tax was originally due, whether and when the tax return was actually filed, whether an extension was requested, whether the taxpayer asked for an offer in compromise on the debt, whether the IRS recorded a tax lien, and more!).

So a practical problem arises when the creditor thinks that the debt fits the rules for not being discharged, but the debtor thinks the debt does not. Since the creditor doesn’t need to raise any objection DURING the bankruptcy case, AFTER it is over it starts pursuing a debt that the debtor believes was discharged. That can get awkward, because it’s illegal for a creditor to pursue a debt that has been discharged in bankruptcy, but legal for it to pursue one that has not been discharged. By this time the bankruptcy case has been closed so you can’t just get a ruling from the bankruptcy judge about this.

To keep things in perspective, this problem doesn’t arise often because, as complicated as the rules are, the attorneys for both creditors and debtors are usually familiar with these rules. So surprises seldom happen. But in the more unusual nooks and crannies of these rules, sometimes they do. The prudent step—if there is any serious doubt about whether or not a debt will be discharged—is to ask the bankruptcy court for a determination about this WHILE the case is still active, so that there is no doubt either way.

Filed Under: Discharge of Debts

Welcome to the Portland Bankruptcy Law Blog

I'd like to help you overcome your financial problems. One good way to start is to provide you with accurate and timely information about the bankruptcy laws. I do that here through informative blog posts, with a new one published here every week. I've been doing this for years so there is a wealth of information for you here.

But please be aware that since you are unique person you need a highly personalized solution to your challenges. That requires the analysis and advice of a conscientious and highly experienced attorney. That's really the only sensible way to get the benefit of the many powerful and effective remedies that the law provides.

So I hope the information provided here is helpful to you. Please contact me for guidance to a much better place:

503-380-7822

Recent Posts

  • No link found between bankruptcy and employment prospects
  • Creditor found in violation of automatic bankruptcy stay
  • What are the short- and long-term credit impacts of bankruptcy?
  • Bankruptcy Attorney Portland, Or | Bankruptcy Lawyer Oregon | Christopher J. Kane P.C.

Categories of Blog Posts

  • Portland Bankruptcy Attorney
  • Personal Bankruptcy
  • Business Bankruptcy
  • Stop Foreclosure
  • Chapter 7 Bankruptcy
  • Chapter 13 Bankruptcy
  • Zero Down Bankruptcy
  • Filing Bankruptcy in Oregon
  • Testimonials
  • FAQ
  • Blog

FREE CONSULTATION

GET A FREE CONFIDENTIAL CONSULTATION THIS MONTH.
*Please see below.

CONTACT

Christopher J. Kane, P.C.

Address: 2207 NE Broadway, Suite 100, Portland OR 97232

Phone: 503-380-7822

Email: chris@ckanelaw.com


We are a debt relief agency.

We proudly help people understand their options and, if appropriate, help them file for bankruptcy relief under the Bankruptcy Code.

DIRECTIONS

CONNECT

  • Email
  • Facebook
  • LinkedIn
  • Twitter
Avvo - Rate your Lawyer. Get Free Legal Advice.
Best Bankruptcy lawyers in Portland
Best Bankruptcy Lawyers in Portland

* Using this form, or email, for communicating with us does not establish an attorney-client relationship, until we do that in writing. So please do not send confidential or time-sensitive information through this form or by email. You affirm that you have read and understand this disclaimer.
CAUTION: This website is to provide visitors with basic information about our firm, and information about how to contact us. Every situation is different, and no information on this website is legal advice on any specific question. You should not act on any of the information without first conferring with an attorney licensed in your jurisdiction. No attorney-client relationship or privilege is formed by visiting this site or by unsolicited email. Therefore, initial emails should not contain any confidential information. We may already represent parties adverse to you and cannot advise or represent you until we check for conflicts. We are licensed only in Oregon and offer our services only to those doing business in Oregon, unless we are associated with local counsel in accordance with other states laws. The applicable laws may have changed after the information on this website was published. While effort is made to keep the information current, you should not presume that all information is up to date. You must confer with an attorney to be sure you have current information.
Copyright © 2021 · Christopher J. Kane Attorney at Law · 503-380-7822 · Designed by Artizon Digital