The U.S. Bankruptcy Code is in place to provide debt relief for individuals and families who have found themselves in debt that is beyond their ability to pay. The Code gives Americans court protection to start over and get a fresh start. The courts are aware, however, that many people may act irresponsibly and choose to abuse the law by deliberately running up high debt, with no intention to repay their creditors. Because of the potential for abuse, bankruptcy judges are strict about following through on requirements for declaring income and debts, including a six-month look back period for Chapter 13 bankruptcy.
The courts are not required to discharge all debt listed on the schedule of income, assets and debts provided by the petitioner. If they see that the petitioner has assumed a significant debt within several months of applying for bankruptcy, the judge may rule that the petitioner assumed the debt under fraudulent conditions, with the intent to discharge the debt through bankruptcy. The creditor may successfully claim that the debt should not be eligible for debt discharge or restructuring in a Chapter 13 repayment plan.
Revoking a Discharge for a Large Debt
A discharge for a large debt may be revoked by the courts if the creditor is able to show that the petitioner fraudulently failed to list the debt on the schedule of assets, income and debts. Bankruptcy is a federal court matter. Petitioners who knowingly omit information required by the courts may face federal fraud charges.
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Learn more about assuming a large debt prior to filing bankruptcy. Call an experienced Florida bankruptcy attorney at The Golden Law Group. We are ready to answer all of your questions about bankruptcy, debt relief and illegal collections practices.
From three convenient office locations, we represent individuals, families and business owners in bankruptcy matters in Bradenton, Brandon, Sarasota, Tampa and communities throughout the Florida Gulf Coast region. If you are over your head in debt and don't know where to turn for relief, turn to us. Contact us today for a free, no-obligation consultation.