Exceptions To Chapter 7 Bankruptcy Discharge

At first glance, it is important to distinguish a nondischargeable liability from liabilities that are excepted from discharge orders. In the former situation, certain categories of claims may not be eliminated in any circumstance. In the latter circumstance, any claim may be excepted from a discharge order because of a debtor's actions. Any intentional act to obstruct the court, trustee or creditors generally creates an exception to discharge. Examples of obstruction include hiding estate assets, the destruction of evidence, perjury, swearing a false oath, or any other act motivated by intentional deception pertaining to listed claims.

When claims are excepted from a Chapter 7 bankruptcy discharge

If an interested party alleges an exception to discharge, a written motion is normally filed. The motion should set forth the objection and the grounds for exception. Following notice, the presiding judge will accept evidence and oral argument during hearing. Judges may render decisions immediately, but may also take the matter under consideration. Most often, because legitimate exception grounds tread far into unethical and/or illegal conduct, debtors seek resolution through adversary proceedings that incorporate an elaborate system of civil procedures designed to insure the right to be heard, object to evidence upon the record, and conform to all requisite for formal federal litigation in a true trial setting.