What Happens in Bankruptcy When a Discharge Gets Denied?

July 10th, 2013 by Reed Allmand

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Most debtors seeking to have debt eliminated or discharged may have the action granted by the bankruptcy court.  Although a discharge can be denied and in many cases it is due to the debtor doing something they should have avoided.  It is important to note that when a discharge is denied, it may not necessarily mean the case is dismissed.  But, it often depends on the situation of the debtor as to how the case will proceed.

The bankruptcy court may deny your request to discharge debt when evidence related to the following is presented:

  • Intention to defraud creditors by concealing or withholding property.

  • Fraudulent acts committed such as destruction or records, perjury, or concealing details.

  • Failure in taking responsibility for loss of assets.

  • Court order violation has occurred.

Any or all debts related to your case could be denied a discharge.  Sometimes the case leads to termination or dismissal, depending on actions carried out by the trustee. In other words, if your case continues to press forward the opportunity to discharge your debt may be lost.

It is important to be honest in reporting information about your case to your trustee or bankruptcy attorney.  If you are denied a discharge in a Chapter 7 case, it is possible such debts may not be dischargeable in a future filing.  There is the possibility of getting them discharged in a Chapter 13 bankruptcy.  You can review this option with an experienced bankruptcy expert.

Reference: http://www.txbankruptcyblog.com/2013/05/articles/bankruptcy-news/my-discharge-was-denied-now-what/

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About Reed Allmand

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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."

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