Making A False Oath Can Lead To Denial Of Bankruptcy Discharge

September 13th, 2011 by Reed Allmand

Making A False Oath Can Lead To Denial Of Bankruptcy Discharge

In a recent Chapter 7 bankruptcy in Texas, a creditor attempted to have a debtor’s bankruptcy discharge denied because they allegedly made a false oath.  The bankruptcy code describes the parameters for which a debtor’s discharge can be denied as the following:

Denial of Discharge Under §727(a)(4)(A): False Oaths.

Section 727(a)(4)(A) provides that:

(a) The court shall grant the debtor a discharge, unless —

(4) the debtor knowingly and fraudulently, in or in connection with the case—

(A) made a false oath or account . . . .

If a debtor makes a false statement, oath or account on their bankruptcy schedules and statement of financial affairs the debtors could face a denial of their bankruptcy discharge.

False oaths sufficient to justify denial of discharge include (1) a false statement or omission in the debtor’s schedules or statement of financial affairs, or (2) a false statement by the debtor at an examination during the course of the bankruptcy proceedings.” Buckeye Retirement Co., LLC v. Bullough (In re Bullough).

In this bankruptcy case the creditor accused the debtor of failing to list the sale of business equipment, omitting the fact that she owned stock and other small omissions from her bankruptcy petition. However, because the creditor failed to prove that the debtor had made an actually “false oath,” that the bankruptcy court could not deny the bankruptcy discharge. However, not every misstatement or omission in the bankruptcy schedules constitutes a false oath. Even if a debtor makes several mistakes on their bankruptcy petition those errors are not sufficient  enough to deny a discharge without evidence that the omissions were intentional and were intended to defraud the creditor.

leagle.com

avatar

About Reed Allmand

Website

Allmand's vision is rooted in his own financially precarious childhood in Abilene "My father always had difficulty holding a job and supporting our family, so after my parents divorced when I was 12, my sister and I got jobs to help make ends meet," he recalls. "I remember what it felt like as a child to worry that our car would be repossessed or home foreclosed on."

View all posts by Reed Allmand

Subscribe

Subscribe to our e-mail newsletter to receive updates.

FAQ

Why do I need to submit a new wage order when I modify my plan

When we modify your bankruptcy plan we are changing your plan payments. This means that we have to get with your employer and change the terms and amount of your wage order. The only way we can do that is by filling out a new wage order form.  

Learn More
What happens if the stay terminates on my home?

If the bankruptcy stay terminates on your home that means that even though your in bankruptcy, your creditor can pursue all there legal remedies they can pursue if you were not in bankruptcy. This includes foreclosure, and having your house sold and evicting you from your house.

Learn More

Find Location

map
  • Dallas Bankruptcy

    5646 Milton Street, Ste. 120 Dallas, Texas 75206
  • Fort Worth Bankruptcy

    860 Airport Freeway, Suite 401, Hurst, Texas 76054
  • More Locations

Meet Our Clients