Your goal when you file a bankruptcy is to obtain a “Discharge” so that you are no longer personally liable to pay your creditors. The Trustee or a Creditor may file an Adversary Proceeding seeking to block your of one of your debts or of all of your debts. The grounds alleged will be that you have done something improper or that the Creditor is in a special class who's debts cannot be discharged.
Adversary Proceedings based upon alleged wrongdoing generally fall into one or more of three different categories, which are: 1. Fraud and False Statements 2. Taking money that you hold in Trust for another person, and 3. Intentionally and maliciously causing damage. The important thing to remember is that Bankruptcy Law favors the Debtor obtaining a fresh start and most instances of wrongdoing are not enough to deny a discharge. Most of the time false statements to a Creditor or to the Bankruptcy Court or even to the IRS are not enough to deny a discharge. See our “results page”.
Adversary Proceedings where the Creditor claims to be in a special class are usually 1. Recent unpaid taxes 2. Student Loans 3. Other government claims and 4. Debts owed in connection with a divorce. There are many technical requirements for these type debts to be truly non dischargeable and more often than not there is a way to defend such Adversaries so that at the least they can be settled for “pennies on the dollar.” And recently the tide has been changing concerning student loans and “hardship” (in repaying the loan) required to discharge student loans is far less than in the past.