Many debtors incorrectly view bankruptcy as a magic button – press it and all their debts go away. Although bankruptcy can be a powerful tool when appropriately used, not all debts are dischargeable in a bankruptcy. For more information on what types of debts are not dischargeable, click here.
If a debtor files bankruptcy because of a creditor’s judgment against them, Catalyst attorneys can file a lawsuit against the debtor in Bankruptcy Court if the nature of the debt falls into some very specific categories. This lawsuit is known as an adversary proceeding. In the adversary proceeding, we would seek to make the debt non-dischargeable because the debt was incurred by:
2) False Pretenses
4) Willful or Malicious Injury
If proven that the debt was incurred through one or more of these ways, a court will rule the debt non-dischargeable and compel the debtor to pay the creditor the debt, even after a bankruptcy.