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Chapter 7: Defending Debtor in Suits Objecting to Discharge

June 8, 2011

Under the Bankruptcy Code (Title 11 of the United States Code), a court shall grant a debtor a discharge unless the debtor fits into one or more of several exceptions to discharge. A party in interest may object to the granting of a discharge by filing a complaint within the bankruptcy case. This filing commences an adversary proceeding. Under certain conditions and within certain time periods, a discharge may be revoked after it has been granted.

When the United States Trustee and/or the Chapter 7 Trustee object to discharge, they generally object to the debtor’s receiving a discharge of any and all debts. When a creditor objects to discharge, that creditor files its action based on the premise that the debtor should not be discharged from the particular debt owed to that creditor.

Examples of actions that fall into the statutory exceptions to discharge are, most commonly, where the debtor intended to hinder, delay or defraud a creditor, or the Chapter 7 Trustee, by transferring, removing, or destroying property of the debtor or of the bankruptcy estate.  Patricia Beary represents debtors who are accused of acts within the scope of the statutory exceptions to discharge. Attorney Beary achieved a hugely successfully outcome defending the debtor in an adversary complaint objecting to discharge based on debtor’s alleged fraud (perpetrated in multiple layers) in obtaining home financing. The plaintiff, a subsidiary of one of the nation’s largest providers of title insurance, was represented by a large national law firm with international presence. The amount which plaintiff sought to except from discharge exceeded $600,000 plus attorneys’ fees. This was a highly litigious adversary proceeding which concluded with a great result for the debtor.

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Welcome to Beary Law PLC

Welcome to Beary Law PLC where you will find a rare combination of expertise in tax and bankruptcy law as well as substantial litigation experience. The scope of Patricia Beary's experience in federal practice for over 25 years distinguishes her from other attorneys.
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Ms. Beary's expertise has led to the removal of liens and levies in the amount of $110,000 and a reduction of the tax liability to zero. In bankruptcy, Ms. Beary successfully represented the debtor/defendant in a suit filed by a subsidiary of Fidelity Financial objecting to discharge of an assessed debt in excess of $600,000. After contentious pre-trial litigation, plaintiff dismissed its complaint against Ms. Beary’s client. Currently, Ms. Beary is negotiating a settlement of a tax liability of approximately $6 million. She has also filed a petition in tax court where the disputed liability is approximately $600,000.
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With a focus on federal tax issues and taxpayers in bankruptcy, Attorney Beary, a former IRS trial attorney and Assistant United States Trustee, has tried cases in the U.S. Tax Court in Arizona and in the U.S. Bankruptcy Court in the District of Arizona, District of Connecticut, and Central District of California. Her experience includes appeals of federal tax and bankruptcy decisions, as well as resolving tax debt by payment plans and offers in compromise.
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