What is Denial of Discharge?

A debtor may receive a "discharge" or a release from liability for certain types of debts by meeting the obligations outlined in bankruptcy law and if they are considered an "honest, but unfortunate, debtor." Debt discharge prohibits creditors from continuing any actions to collect the debt which can include phone calls, personal contact or letters.

Possible Reasons for Denial of Discharge

• concealing or destroying assets or financial records
• making incomplete or false statements on schedules or under oath, the debtor is not an individual
• the debtor did not keeping sufficient records which can be used to ascertain the debtor's financial condition or the debtor failed to complete an instructional course for personal financial management (11 U.S.C. 727 outlines a full list of reasons a discharge may be denied)

Discharges are mainly used to penalize debtors who are dishonest and are purposely trying to stop creditors from collecting debt. If the debtor's discharge is denied for a bankruptcy claim, the debt may not be discharged during any subsequent bankruptcy procedures. If the debt discharge is denied the trustees is allowed to continue administering the bankruptcy case and this can include liquidating assets which are non-exempt, to repay creditors. All information provided for the bankruptcy filing must be honest, accurate and complete. Talk to a bankruptcy lawyer for more information about accurately filing a Bankruptcy Petition.