When filing for bankruptcy, the court usually issues a discharge. A discharge means you are no longer responsible for certain debts (there are exclusions to what debts are included).
This is the desired outcome; however, there are situations where a discharge may be denied. Learn when this may happen here.
Reasons the court may refuse to issue a discharge
The court must have legal validation to deny your discharge.
A common reason this occurs is improprieties by the debtor, such as hiding assets or lying to the court. Besides having the discharge denied, you may face additional legal consequences if this happens, including creditor lawsuits.
Another issue is if you do not communicate with the bankruptcy trustee. For example, not paying mandatory payments for Chapter 13 bankruptcy and not explaining can lead to problems in having the bankruptcy discharged.
Statutory reasons can cause a denial, too. One example is if you file a subsequent bankruptcy before enough time has passed.
Handling issues related to your bankruptcy filing
Usually, filing for bankruptcy is a seamless process. However, some situations may require knowing your legal rights and options. If the court denies your discharge, seeking help with the situation is best. It is impossible to know all your options, so learning what these are will ensure you have the best chance of the desired outcome.
Securing a bankruptcy discharge can help you have a fresh financial start. Knowing all the issues that may arise can help you avoid them.
