There is a section in the Bankruptcy Code that outlines which debts are not going to be discharged in a Bankruptcy. There are some debts the law believes you should not be able to get rid of without paying. Fraud is a good example. You should not be able to defraud someone out of their money and then discharge their debt. Now the victim would have to prove all the elements of fraud in the bankruptcy court here in San Jose in order to prevail, but that avenue is available to them.
One of the other exceptions to discharge involves debts arising out of willful and malicious conduct. I have seen a creditor come into a bankruptcy case and try to claim that the bankruptcy client should owe them $10,000 based on a default judgment received over an online yelp review. The Creditor tried to show that the conduct of the Debtor in leaving an online review was willful and malicious conduct. The issue centered around the fact that the review purported to accuse the creditor of insurance fraud, which is a bit of a problem since that would be a crime.
The case never made it to a judge for a final determination. This is largely due to the expertise of yours truly in helping to resolve the case in an equitable way. Nonetheless, there is a danger when you are filing bankruptcy. The types of debt you have matter. Whether or not those debts will be discharged is at the heart of what you pay for from a bankruptcy attorney.
I’m going to stress again here that you need a good attorney. This is going to be someone who asks you questions about your case prior to filing. You should have about a 2-hour meeting with your attorney prior to filing the case, reviewing every question asked. Chapter 7 Bankruptcy is a mine field and all it takes is one fact about one debt that can truly complicate your bankruptcy. Don’t go in thinking your case is a simple one and that you can get away with a cheap attorney. There truly are so many good ones here in the Bay Area. Look around.