Will My Creditors Dispute My Bankruptcy Claim?

 Posted on January 22, 2026 in Bankruptcy

Many people worry that their creditors will fight their bankruptcy filing. The good news is that most creditors do not dispute bankruptcy cases. Creditors understand that bankruptcy is a legal right, and in most situations, they accept the outcome without objection. However, certain circumstances can lead creditors to challenge your case. Understanding when and why this happens can help you prepare and protect your fresh start.

If you are considering filing for bankruptcy in 2026, speaking with a Houston bankruptcy attorney who is Board-Certified in Consumer Bankruptcy Law by the Texas Board of Legal Specialization can give you confidence in your case. Our firm offers free consultations to help you understand your options and avoid common problems that trigger creditor disputes.

When Can Creditors Sue Debtors in Bankruptcy?

Once you file for bankruptcy, the automatic stay goes into effect immediately. This is a powerful protection under 11 U.S.C. Section 362 that stops all collection activity, including:

• Lawsuits

• Phone calls

• Wage garnishments

• Foreclosures

Creditors cannot sue you while the automatic stay is in place. If a creditor violates the stay by continuing collection efforts, they can face sanctions from the bankruptcy court.

Collections Vs. Objections in the Consumer Bankruptcy Process

Creditors do have the right to file objections in your bankruptcy case. An objection is not the same as a lawsuit. Instead, it is a formal request asking the bankruptcy court to deny the discharge of a specific debt or to dismiss your entire case. Creditors who file objections must prove their claims to the bankruptcy judge.

Most creditor objections fall into a few categories:

• The creditor may claim you incurred the debt through fraud or false pretenses.

• They may argue that you recently charged luxury purchases on a credit card with no intention of paying.

• They may also object if they believe you transferred or hid assets to keep them away from creditors.

These objections are serious, but they require evidence. Simply owing money does not give a creditor the right to block your bankruptcy.

How Do You Defend Against Fraud Allegations in Bankruptcy?

Fraud allegations are among the most common reasons creditors object to a bankruptcy discharge. Under 11 U.S.C. Section 523, certain debts cannot be discharged if they were obtained through fraud, false pretenses, or false representations. Creditors must prove that you:

• Made a false statement, and

• You knew it was false when you made it, and

• You intended to deceive the creditor, and

• The creditor relied on your statement and suffered a loss as a result.

Is Using Your Credit Card Before Bankruptcy Fraud? 

A common example involves credit card charges made shortly before filing bankruptcy. If you charged thousands of dollars for luxury items or cash advances within 90 days of filing, the credit card company may claim you never intended to repay the debt.

However, charges for ordinary living expenses like groceries, utilities, and medical bills are not considered fraudulent. Texas law recognizes that people sometimes need to use credit cards while struggling financially, and this does not automatically equal fraud.

Defending Against Fraud Allegations in Consumer Bankruptcy

You need documentation and honest testimony to defend against fraud allegations. Your bankruptcy attorney will help you by reviewing your financial records, credit card statements, and the circumstances surrounding the charges.

If you bought things because you genuinely needed them and believed you could repay the debt at the time, this is a valid defense. Many fraud objections are withdrawn or dismissed once the creditor sees the full picture of your financial situation.

What Happens If You Are Accused of Hiding Assets in Bankruptcy?

Hiding assets in bankruptcy is a serious offense that can result in criminal charges and the denial of your discharge. Under 11 U.S.C. Section 727, the bankruptcy court can deny your entire discharge if you concealed property, made false statements under oath, or failed to keep adequate financial records. This means you would get no debt relief at all, and your creditors could start up collection efforts again.

The best way to avoid accusations of hiding assets is to be completely honest from the start. Before you file bankruptcy, tell your lawyer about every asset, every account, and every piece of property you own or have an interest in. Honesty protects your case so you can get the fresh start you need.

Call a Houston, TX Bankruptcy Lawyer Today

Creditor disputes in bankruptcy are not common, but they can happen. Having a Brazoria bankruptcy attorney who is Board-Certified in Consumer Bankruptcy Law by the Texas Board of Legal Specialization gives your case an advantage.

Call The Fealy Law Firm, PC at 713-526-5220 today to schedule a free consultation.