Legal Question in Bankruptcy in Illinois

Re: What is dismissable in a bankruptcy.

The correct terminolgy would be that nsf checks are subject to challenge for dischargeablity based on fraud, however the burden is on the creditor to object before discharge under code section 523 et al

Re: What is dismissable in a bankruptcy.

Short answer -- most likely the debts connected with your "nsf" checks can be eliminated.

The term used in bankruptcy to eliminate debts is called "discharge" and issues relating to the whether a particular debt is "dischargeable" is found in Section 523 of the Bankruptcy Code.

The creditors who possess the nsf items you mentioned will have to make an appearance in the bankruptcy proceeding and specifically challenge dischargability. My experience tells me that few creditors will take this step so in my opinion these debts will be discharged.

There are two provisions of the law in Section 523 that suggest the nsf debts could be non-dischargeable (remember the creditors must come forward and make these arguments!). First, debts that are associated with fraud are non-dischargeable. So, for example, if you wrote these checks all in one day knowing you did not have money in the bank to cover them, then an argument can be made that you acted with an intent to fraud. I assume this wasn't the case. Second, debts related to fines and penalties owed to cities and counties are non-dischargeable. NSF checks in some states are filed in a criminal or small claims court. If this has happened to you the fines or penalties imposed against you in addition to restitution are non-dischargeable under Section 523. ph. (800) 303-0720