Denial of Entire Bankruptcy Discharge
In a Chapter 7 or Chapter 11 case a debtor’s entire discharge can be denied under certain circumstances. It is an oft-quoted maxim that the fresh start in bankruptcy is limited to the “honest, but unfortunate, debtor.”
There is another section of the bankruptcy code, 11 USC 727, which allows a creditor or party-in-interest to object to your ENTIRE discharge if certain criteria can be proved. Among these are the following:
- The debtor, with intent to hinder, delay or defraud, transferred, destroyed, or concealed property within one year prior to filing the bankruptcy, or after the filing of the bankruptcy;
- The debtor concealed, destroyed, falsified or failed to keep and preserve books and records showing debtor’s financial position.
- The debtor knowingly made a false oath or account, presented a false claim, etc.
Again, there are many more of these, which you can see by clicking on the 727 link above, but these are the main ones. It is more difficult to prevail on an objection to the debtor’s entire discharge than it is to object based on just a specific debt.
However, having one’s discharge denied does not affect the administration of the bankruptcy case. The Trustee (at least in a Chapter 7 context) can (and will) continue to liquidate (sell) any non-exempt assets of the debtor and pay the creditors. Thus, it is extremely important to be accurate and honest on the information given on the bankruptcy petition and schedules, as well as to be filing the bankruptcy case in good faith.
Click Here for information on the section 523 denial of discharge of individual debts.
by, Mark Markus