When people decide to file Chapter 7 bankruptcy, their goal is to obtain a discharge. The discharge is the court order that eliminates an individual’s liability to repay their debts. This is what gives individuals the fresh start they are looking for.
However, Kentuckians must complete all the necessary steps of the bankruptcy process to obtain a discharge. And unfortunately, there are times when the court could deny someone a discharge of their debts.
Reasons the court could deny a discharge
There are many reasons that the court might deny a discharge, including if someone:
- Hides property or finances to keep them out of the liquidation process
- Transfers ownership of any property during bankruptcy, so it is not a part of the estate
- Fails to attend the required credit counseling courses
- Provides false information about income or earnings
Bankruptcy trustees and attorneys stress the importance of being honest in the paperwork and filing for a reason. Deceiving the court in any way is often what leads to a denied discharge.
A previous discharge could also lead to a denial
Sometimes, the court can deny a discharge or bankruptcy filing simply because of the bankruptcy rules. Technically, an individual can file bankruptcy as many times as they may need. However, they must wait for a period:
- Individuals must wait at least eight years between Chapter 7 filings
- And they must wait six years to file Chapter 7 if they previously filed a Chapter 13 bankruptcy
There are different waiting periods for different bankruptcy cases and discharges.
Discharges can be revoked too
If the bankruptcy court discovers the above incidents of dishonesty or fraud after they issued a discharge, then they can revoke it. Creditors usually must file a complaint within one year after the individual received their discharge to have the court revoke it. Then the court will reexamine the case and assess the evidence provided.
If the court denies or revokes someone’s discharge, then they are still responsible for repaying their debts. However, if someone believes that the court wrongfully denied their discharge, then they can contact an experienced bankruptcy attorney to determine their next steps forward to debt relief.