Discharge in bankruptcy is the brass ring, the reason you filed your case in the first place. But before you step into the court system, be aware that it can be denied by the bankruptcy court.
What Are The Grounds For Denial Of A Bankruptcy Discharge?
You will certainly face denial of your discharge in bankruptcy if the court finds that you transferred, removed, destroyed, mutilated, or concealed, or permitted to be transferred, removed, destroyed, mutilated, or concealed any property within one year before the date of the filing of the petition; or any property you owned at the time of filing your case (unless the bankruptcy trustee gives you permission to do so).
The court must find that you took these actions with the intent to hinder, delay, or defraud a creditor or an officer of the estate charged with custody of property.
Your can can also be sunk if you concealed, destroyed, mutilated, falsified, or failed to keep or preserve any recorded information, including books, documents, records, and papers, from which your financial condition or business transactions might be ascertained, unless such act or failure to act was justified under all of the circumstances of the case.
You can be denied a discharge in bankruptcy if you knowingly and fraudulently (A) made a false oath or account; (B) presented or used a false claim; (C) gave, offered, received, or attempted to obtain money, property, or advantage, or a promise of money, property, or advantage, for acting or forbearing to act; or (D) withheld from an officer of the estate entitled to possession under the bankruptcy laws, any recorded information, including books, documents, records, and papers, relating to
your property or financial affairs.
You can be denied a discharge in bankruptcy if you fail to explain satisfactorily, before determination of denial of discharge, any loss of assets or deficiency of assets to meet your liabilities.
Your Chapter 7 bankruptcy case will also be in trouble if you refuse (A) to obey any lawful order of the court, other than an order to respond to a material question or to testify; (B) on the ground of privilege against self-incrimination, to respond to a material question approved by the court or to testify, after being granted immunity with respect to the matter concerning which such privilege was invoked; or (C) on a ground other than the properly invoked privilege against self-incrimination, to respond to a material question approved by the court or to testify.
But before you break out into a cold sweat, fear not – discharges are not denied often. The provisions of the U.S. Bankruptcy Code are intended as a penalty for people who deliberately try unfairly or dishonestly to thwart their creditors. When you fully disclose your assets and financial history there shouldn’t be a problem obtaining a discharge in your Chapter 7 or Chapter 13 bankruptcy case.
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