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Under what conditions could your debt discharge be denied

Just because you file for Chapter 7 bankruptcy doesn't mean that your bankruptcy process will be a success. In fact, although they're rare -- and only happen about 1 percent of the time -- there are some circumstances in which a bankruptcy discharge could be denied. This article will review some of those circumstances so you can be sure to avoid them in your own Chapter 7 process.

One way a discharge could be in jeopardy is if a party that's owed a debt files a formal complaint against the discharge, or files a motion to extend the objection time. Barring these events, the bankruptcy court will issue its discharge order about 60 to 90 days after the scheduled meeting of creditors date.

For an objection of discharge to be granted, the debtor must have comitted one of the following:

-- Failed to produce sufficient financial records;

-- Committed a crime related to the bankruptcy, like fraud;

-- Failed to explain the loss of an asset;

-- Failed to follow lawful orders issued by the bankruptcy court;

-- Committed fraud related to destroyed, concealed or transferred property that should have been incorporated into the bankruptcy estate; or

-- Failed to follow through with required bankruptcy course material, such as credit counseling and financial management.

Debtors can ensure that they do not commit one of the above reasons for a denial of discharge by retaining a bankruptcy law attorney to help them with their cases. A bankruptcy lawyer will help borrowers avoid common pitfalls, while helping them keep as many of their personal assets as possible through the Chapter 7 liquidation process.

Source: FindLaw, "Chapter 7 Debt Discharge," accessed March 17, 2017

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