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During a normal bankruptcy case, the debtor files a petition with the bankruptcy court requesting either Chapter 7 Bankruptcy or Chapter 13 Bankruptcy and ultimately guarantees the placement of an automatic stay on all debt collection actions. Unfortunately, not all bankruptcy cases go by smoothly. You can discover some of the reasons why litigation is often necessary in bankruptcy cases with this overview.

Arguments over Dischargeable Debts

One of the first reasons that many bankruptcy cases require litigation or court intervention arises due to arguments over which of the individual’s debts can be eliminated or repaid to the trustee. This is often a major problem, as the belief that certain debts will be eliminated is the main reason individuals file for bankruptcy.

Disputes over Property Ownership

Individuals filing for Chapter 7 Bankruptcy can have their non-exempt assets liquidated so that the proceeds satisfy their debts. However, this may lead to its own set of complications, especially when an argument arises regarding the true ownership of a non-exempt property item.

Estimated Property Value

According to the United States Courts, disputes over the estimated property value often lead to litigation when it comes to bankruptcy law. Arguments over how the property should be used may also lead to bankruptcy litigation.

Associated Fees

While not as common, bankruptcy litigation may be necessary in the event that there is a disagreement regarding how much money should be paid to accountants, auctioneers, and other bankruptcy professionals.

With several years of experience behind us, the bankruptcy lawyers with Cutler & Associates, Ltd. are devoted to providing all of our Aurora and Schaumburg clients with the high-quality legal representation they deserve. Let us help you complete the bankruptcy petition or represent you in the event that your petition requires litigation.