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P I T F AL L S O F C H AP T E R 7 B AN K R UP T C Y
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a The debtor's purpose in using Chapter 7 is to get

debt discharges as many as he or she can. The
universal rule is that any created debt prior to the
bankruptcy filing is discharged. Bankruptcy
discharge wipes out a person's liability on a debt or
claim. A San Antonio Bankruptcy Attorney can
help. However, it is important to note that although
a person's liability can be discharged, most liens are
not affected by bankruptcy.
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a The universal rule that all debts will be discharged

has a few but very important exceptions. For
instance, a creditor can seek to contest a debt
discharge using the provisions of 11 U.S.C. 523. The
creditor can claim that the debt was obtained by
fraudulent representation or other forms of
dishonesty. Contact a San Antonio Bankruptcy
Attorney. If the debt is not discharged, the debtor
would remain liable for paying the creditor;
apparently, this will have an effect on the debtor's
purpose in filing Chapter 7, which is to get a
financial fresh start.
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a 0hen the debtor's financial obligations have

become extremely burdensome, Bankruptcy Code
discharges debts, but it also gives some special
exemptions to make sure that this alleviation is
provided only to the "honest but unfortunate
debtor." There are debts that survive bankruptcy
from discharge under 523. A San Antonio
Bankruptcy Attorney would know more. These are
divided into two sections: non-dischargeable debts
due to the debtor's misconduct and non-
dischargeable debts due to public policy.
 
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a The non-dischargeable debts due to the debtor's

unlawful conduct include those incurred by
deliberate tort, theft, fraud, scam, drunken driving,
and fiduciary breach. The non-dischargeable debts
due to public policy include educational loan, child
support, alimony, customs duties and taxes,
government fines, penalties, and forfeitures,
unscheduled claims, and certain debts that survive
a preceding bankruptcy case. Contact a San
Antonio Bankruptcy attorney if any claim that falls
within one of these exceptions are not
dischargeable.


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a There are potential problems that can take place

with debts such as a credit card debt since 523 also
has a provision that certain debt created from
obtaining luxury services or items within 40 days prior
to filing a Chapter 7 is not dischargeable. 0hen a
San Antonio bankruptcy attorney can help.
Moreover, under fraud exception, there are certain
credit card debts that have been found by the
courts to be non-dischargeable because using a
credit card implies that the debtor intends and can
pay for the services and goods charged.
 
 




a Aside from creditors pursuant to 523, the pursuant of U.S.C. 727

by a creditor or the trustee may result a court·s disapproval of
a final discharge in bankruptcy, regardless of its nature, if the
debtor fails to sufficiently explain how any asset was lost,
disobeys court orders, withholds estate records, any action or
forbearing of action in order to obtain an advantage,
intentionally makes an untrue claim, oath, or account in a
bankruptcy case, fails to preserve or falsifies financial records,
and conceals or destroys his property after filing Chapter 7 or
within the period of one year before the date of filing, in order
to defraud or hinder a creditor. Lastly, a Chapter 7 case may
be dismissed by the court due to the debtor's unscheduled
claims, unpaid required payments or fees, or unreasonable
delays of the proceedings. For professional legal advice I
recommend San Antonio Bankruptcy Attorney.