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Under what circumstances can a court deny a discharge of debts?

On Behalf of | Feb 22, 2017 | Personal Bankruptcy

Chapter 7 bankruptcy is a legal tool that Pennsylvanians may use to eliminate their outstanding and unmanageable debts. Though it requires a filing party to sell off or liquidate much of their wealth in order to pay off their creditors, there are exemptions that the filer may utilize to protect some of their most important property.

After a party files for Chapter 7 bankruptcy and begins the liquidation process, they may look forward to the day that they finally achieve their discharge. A bankruptcy discharge releases a party from their obligation to pay the debts that were included in the bankruptcy proceeding. Though not all debts can be discharged in bankruptcy it is generally the goal that filers hope to reach when they begin the bankruptcy process.

Unfortunately, there are a number of ways that a person may find their hopes of achieving a Chapter 7 bankruptcy discharge of debts thwarted. If the person commits a fraud or perjury with regard to their bankruptcy court dealings their discharge may be denied. Failing to accurately report wealth or property, or intentionally concealing assets or financial records may also result in the denial of a discharge. The failure of a party to abide by the rules that the bankruptcy court has sent forth with regard to orders and terms of the process may also lead to a party having their discharged denied.

Though it is not common, a party may work through the Chapter 7 bankruptcy process and ultimately see their hope of receiving a debt discharge denied. Since a denial of a party’s discharge may result from simple mistakes made during the bankruptcy process, many individuals prefer to use the services of bankruptcy attorneys to make sure that their filings and ultimate debt discharges are appropriately managed.