June 18, 2019

What Prompts a Dischargeability Objection by a Credit Card Lender?

First, I think you have a very insightful blog about bankruptcy issues. I refer your blog to the bankruptcyforum.com sight to all the guest and members there. I’m just curious on your opinion to my following Bk Trip. I was working 2 full time jobs, making about 65g’s a year, I filed Bk13 (was in a no asset, unsecured cc debt/loans (unsecured) for about 65-70gs) My last cash advances were May 06 (minimal one for $500) in April 06 (big one for $4000-6000). Brief outline from the last cash advances to date of filing:

April – cash advance of about 4-6gs’
May – cash advance of about $500
July – filed Bk 13 end of July
Aug – Ch13 341 Meeting
* Trustee objected to my “good-faith,” payback of $250 a month *
The Median Test proved I was not in presumption of abuse and I had negative -$60 disposable income, Schedule I and J proved I had $800
October – Objection to confirmation goes Easter District, state of Virginia Judge
* Judge did not want say yay or nea and wanted me to re-submit another plan, Judge mentioned I was not forced to work 2 jobs, I could quit one and convert to Ch13, or I could resubmit a new plan * It only made sense for me to quit one job than have to payback $800 bucks for the next 5 years *
Oct – I quit one job, converted to Ch7
Nov – Ch7 341 meeting
Now I’m just waiting to discharge (hopefully by January) last day for creditor objections Jan 8, 2007

At the time I was in Ch13, I didn’t hear of any objections from creditors or even a peep about my recent cash advances from April-May. (due to being a gambler) I thought it my Bk would be a big issue. Not a peep about that either. Now that I’ve converted to Ch7 and another 60 day to objection starts over. My concern is what are the chances of objection/adversary’s coming up from creditors. My thoughts are this, I haven’t paid any of them since June/July its been IF you count from MAY until now (DEC) about 6-7 months since my last cash advance (I think its like 180 days one should wait if they’ve had heavy spending on their credit cards – and since mine were cash advances due to gambling – I would think it would be a big issue!)

What are your thoughts?

Thanks, Mickey aka Catchmeifyoucan

Jonathan Ginsberg responds:  Mickey, thanks for the kind words.  To answer your question….my experience has been that most credit card lenders will not object to dischargeability if the total debt owed to that particular creditor is $15,000 or less.  I suspect that the cost of retaining counsel and pursuing smaller claims is too high.  I also think that the more time between your use of the cards, the better.  Here, you have a fairly large cash advance in April, but you do have a good faith payment in May, then a Chapter 13.  You did not say how large your total balances are to any particular lender.

Under the old law, debts that were not dischargeable in a 7 would be dischargeable in a 13.  That has now changed but I have not seen much of a change by the credit card lenders.  Here, because your loans were most likely coded as a Chapter 13, you may slip through the cracks.  This is even more likely if your case was filed in a busy filing district.

If the bankruptcy specialist at the credit card company wakes up, he would see that his company does have leverage to push you into some sort of a payback settlement.  However, if you have not heard anything by now, you may be under the radar.

[tags] recent credit card use and bankruptcy, dischargeability action, credit card advance, Section 523(a), Chapter 7 discharge [/tags]

About Jonathan

Jonathan Ginsberg represents honest, hardworking men and women in the Atlanta area who need personal bankruptcy protection. In practice for over 25 years, Jonathan teaches bankruptcy law and practice at legal continuing education seminars and he is a founding member of the Bankruptcy Law Network. Jonathan lives with his wife and children in Atlanta.

Comments

  1. MANY PEOPLE DOWN HERE THOUGHT THIS WAS A NEW PROVISION, BUT I CHECKED, AND IT IS NOT.

    THIS PROVISION DOES NOT ALLOW A CHAPTER 7 TRUSTEE TO GO AFTER YOUR HOME TO PAY FOR PAST DUE CHILD SUPPORT.

    THE PROVISION MERELY STANDS FOR THE PROPOSITION THAT NOTHING IN THE BANKRUPTCY CODE SUPPLANTS THE CHILD SUPPORT CREDITOR’S RIGHTS UNDER NON-BANKRUPTCY LAW. IN OTHER WORDS, THE DEBTOR CANNOT SAY THAT 522 PROTECTS HIM FROM A CHILD SUPPORT CREDITOR’S LEVY OUTSIDE OF BANKRUPTCY.

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