No matter what you have read online, the decision to pursue bankruptcy proceedings is a deeply personal one and is not a one-size fit all solution for everyone. In fact, bankruptcy proceedings can be complicated and may not turn out the way you hope. This is why it is necessary to consult with a knowledgeable and experienced attorney to consider your circumstances and help you weigh your options.
What is Discharge?
Chapter 7 bankruptcy involves the liquidation of a debtor’s assets with the proceeds going toward paying off debts. The bankruptcy code establishes what assets are subject to liquidation and the priority with which debts are treated. In most Chapter 7 cases no assets are actually liquidated. The ultimate goal of bankruptcy is to obtain a “discharge in bankruptcy”. This is an order from a bankruptcy court that legally absolves debtors of specific types of debts, which creditors are thereafter barred from collecting in the future.
What Circumstances Could Result in a Denial of Discharge?
Under the Bankruptcy Code Section 727(a), a court is required to grant the debtor a discharge; however, there are exceptions to this, such as when it is found that a debtor has:
· “transferred, removed, destroyed, mutilated, or concealed property” with an “intent to hinder, delay, or defraud a creditor”, or has authorized such an action;
· “concealed, destroyed, mutilated, falsified, or failed to keep or preserve” records which could have been used to ascertain the debtor’s financial condition;
· made certain fraudulent claims, acts, or omissions in association with the bankruptcy proceedings;
· failed to explain to the court’s satisfaction any loss or deficiency of assets to pay off liabilities;
· failed to obey a lawful order of the court or to answer a material question approved by the court; or
· been granted a discharge from Chapter 7 bankruptcy within the last 8 years.
Underlying these exceptions is the requirement that a debtor be truthful to the court and operate in good faith. Failure to do so can undercut a debtor’s entire purpose for seeking bankruptcy relief. To make matters worse, even if a court denies discharge, a trustee can continue to sell the debtor’s assets to pay off creditors.
You Need an Attorney to Defend Your Legal Rights
Bankruptcy cases are serious and incredibly complicated legal proceedings. At Levitt & Slafkes, P.C., we appreciate the gravity of these proceedings to your financial future and your life. With over thirty years of experience, we know the law and take pride in getting things right the first time. Let us help you attain some much needed debt relief. Call our office at (973) 323-2953, or contact us online to schedule an appointment.