Debtor FAQ's
Under what circumstances might a bankruptcy discharge be
denied?
A debtor can be denied a discharge of all of his debts if the
court finds, after trial, that the debtor committed certain acts
deemed incompatible with the "honest but unfortunate debtor". Such
acts include transferring, concealing or destroying assets or
financial records; making a false oath on the schedules or under
oath in the case; or failing to keep books and records from which
the debtor's financial condition can be ascertained.
Denial of discharge affects the debtor's liability to all
creditors, whether or not the debtor committed some fraudulent act
with respect to that creditor. Denial of discharge doesn't stop the
administration of the case, either. The trustee proceeds to gather
and liquidate the assets of the estate, so the debtor loses not only
the non-exempt assets, but any chance of ever discharging the debts
in bankruptcy.
Discharges are not denied lightly or easily. This is intended as
a penalty for debtors who deliberately try unfairly or dishonestly
to thwart their creditors. Debtors who fully disclose their assets
and their financial history should not worry about denial of
discharge.
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