Barriers to A Discharge in A Personal Bankruptcy

Most people in Rockland County who have endured the rigors of a personal bankruptcy filing felt that the outcome justified the effort, because many debts were discharged. Sometimes, however, the debtor will fail to attend to one or more necessary details and will learn that a discharge will not be granted.

One of the more common errors is the failure to pay the filing fee. The fee is $335 for a Chapter 7 proceeding and $310 for a Chapter 11 proceeding. Most bankruptcy courts will allow the filer to pay the fee in installments. Another common omission is the failure to take the mandatory credit counseling and financial management courses. Both of these omissions can usually be charged to negligence on the part of a person who is under the stress of the bankruptcy proceeding.

Other omissions that can forestall a discharge are the results of more deliberate acts by the debtor. The failure to obey a directive of the trustee or an order of the bankruptcy judge will prevent the entry of an order of discharge. A debtor who concealed, destroyed or transferred property with intent to hinder, delay or defraud before filing the bankruptcy petition will also be denied a discharge. A similar penalty attaches to the debtor’s intentional concealment or destruction of financial records. Lying at the first meeting of creditors or in any court proceeding will also prevent a discharge.

Debtors occasionally omit certain creditors or debts from the schedules that are filed with the petition. The order for discharge will not apply to any debt that is not included in the schedules.

Anyone who has a number of creditors or whose financial situation is complicated by unusual loans or security arrangements may wish to get more information about bankruptcy to attempt to ensure that all debts are disclosed and that all eligible debts are discharged.