Arizona Bankruptcy Law - "Can creditors object to discharge?"
Debtors do not have an absolute right to discharge in Arizona bankruptcy proceedings. A grant of
discharge is subject to court review and subject to all creditor objections filed. Creditor objections must be
resolved by the court before a discharge may be granted. Creditors do not need court approval to file motions
objecting to relief or file complaints to initiate adversary proceedings. An
adversary proceeding is similar to a lawsuit, within a lawsuit, that requires
adjudication before the debtor's bankruptcy case may progress.
Creditors and their objections are subject to deadlines and are assigned the
burden of proof. In practice, because creditors carry the burden of proof, doubt
is resolved in favor of the debtor. If motions or complaints are late, unclear, or
unconvincing, relief requested by the debtor will proceed. Specific reasons which
support a creditor's motion to deny discharge are set forth partially in 11 U.S.C.
523, and include the following:
- Debts incurred through fraud.
- Purchases of more than $1,000 in luxury goods or services from a single
creditor within 60 days of filing.
- Liability omitted from the list of creditors or schedules, or incorrectly
identified in the list of creditors or schedules.
- Student loans, unless repayment would cause undue hardship.
- Undeclared federal, state, and local taxes.
- Credit card payments for taxes can not be discharged in Arizona bankruptcy.
- Child support payments, alimony and related obligations.
- Fines and restitution to crime victims.
- Fess imposed by courts can not be discharged in Arizona bankruptcy.
- Fines and judgments resulting from DWI, DUI, or intoxication.
- Liabilities deemed nondischargeable in previous bankruptcies due to fraud or
malfeasance.
The Federal process of filing necessarily incorporates state law requirements. These state law requirements are
set forth in statutes, rules and case law opinions which frequently alter the operation of law. As a result of
these precedents, Arizona bankruptcy cases are unique to the state, as well as unique to each individual who
files. All alternatives provided by law may not be available because of differing individual financial histories
or prior case filings.
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