Three Reasons a Court May Deny a Bankruptcy Discharge

Three Reasons a Court May Deny a Bankruptcy Discharge

If you are considering Chapter 7 bankruptcy or Chapter 13 bankruptcy, one of the factors most likely to motivate you to file is the debt relief bankruptcy can provide. Regardless of the form of bankruptcy you select, the process’s ability to eliminate debt is contingent upon a court granting what is known as a  bankruptcy discharge. When a bankruptcy discharge is granted, all remaining dischargeable debt is eliminated. This provides the bankruptcy filer with a fresh financial start.  

However, in certain scenarios, a court may refrain from granting this benefit. Aside from certain types of debt that are statutorily difficult to discharge, such as student loan debt, typically, a court will typically only deny a bankruptcy discharge when the taxpayer has committed wrongdoing. Alternatively, a court may also deny relief when the individual has or failed to complete or comply with certain aspects of the U.S. Bankruptcy Code.

The Philadelphia bankruptcy lawyers of Sadek & Cooper can increase the likelihood that your Chapter 7 or Chapter 13 bankruptcy petition will conclude with your freedom from debt. To discuss how a Sadek & Cooper lawyer can guide you through the entire process, call our law firm at 215-545-0008.

Bankruptcy Mistake #1:  You Failed to Comply with Credit Counseling or Other Terms Set Forth by the U.S. Bankruptcy Code

The U.S. Bankruptcy Code sets forth the exact process by which a bankruptcy filer must proceed. Furthermore, listings of local rules and standing orders are made available by each federal bankruptcy court. For Philadelphians and other Pennsylvanians located in the Easter District, local rules, standing orders, and bankruptcy forms are available for review online.

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One bankruptcy obligation introduced by the 2005 bankruptcy reform act for all filers is mandatory credit counseling. Per the U.S. Bankruptcy Code, individuals who wish to file for Chapter 7 bankruptcy or Chapter 13 bankruptcy and receive a discharge must undergo credit counseling in six months before filing for bankruptcy relief. Individuals who fail to take this course may be denied debt relief by the bankruptcy court. Likewise, bankruptcy filers are also required to take a financial management course. This course is intended to reduce the likelihood that filers take on significant new debt immediately after discharge. The failure to complete either or both of these mandatory aspects of a bankruptcy can result in a bankruptcy discharge denial.

Bankruptcy Mistake #2:  You Committed Bankruptcy Fraud

Perhaps the most common reason why bankruptcy discharges are denied is because the court believes that fraud has occurred. Fraud comes in many forms but generally involves an individual who makes false statements or provides inaccurate information to induce others to take action and achieve his or her goals. Any action the debtor takes with the intent to hinder, delay, or defraud a creditor can theoretically result in a denial of a bankruptcy discharge. If the taxpayer fails to disclose certain assets, mischaracterizes debts, or forgets to mention certain transfers of property, he or she runs the risk of the court finding fraudulent intent that can result in a denial of bankruptcy relief.

Bankruptcy Mistake #3:  You Can’t Explain what Happened to Assets

In some cases, an individual may find themselves in debt due to a lack of a budget. In other situations, the debtor’s finances may simply be a disorganized mess in complete disarray. It may take the work of dedicated forensic accountants to begin to shed light on what occurred. Unfortunately, in some instances, the accountants may discover that certain assets have gone missing. In any case, nothing the individual has provided can explain what happened to certain assets.

In a situation like this, the court may conclude that the behavior was not accidental or simply part of the carelessness that led to the dire financial situation. Rather, the court may conclude that you didn’t simply make a mistake or lose track of assets, but are engaging in fraudulent transfers to protect the asset. This type of scenario is more common than one might expect. It is essential to mention this fact to your lawyer so he or she can explore how to address it.

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Work with an Experienced Bankruptcy Attorney in Philadelphia

The denial of a bankruptcy discharge is a serious matter. While a court may deny a discharge in whole or in part, underlying problems with the petition are more likely to result in blanket denials. In a scenario like this, all debts will remain and the bankruptcy trustee can still liquidate your non-exempt property. A scenario where you lose property and do not obtain debt relief is clearly one to be avoided.

The bankruptcy attorneys of Sadek & Cooper can address all foreseeable issues that can introduce complications into a Chapter 7 or Chapter 13 bankruptcy petition. To discuss how they can help you obtain debt relief, call 215-545-0008 today.

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SEEWHAT OUR CLIENTS ARE SAYING

Thomas Wright
Thomas Wright
15:09 24 Apr 18
Sadek and Cooper Law did a great job on my bankruptcy case. I really appreciate their assistant. Thank you
Kelly McKenna
Kelly McKenna
11:57 19 Apr 18
This form - specifically Yoninah Orenstein and Patrick Cooper are PHENOMENAL. They were great to work with, very fair with legal fees, and successful in getting an excellent settlement for my divorce (short term marriage
Dessiana Cruz
Dessiana Cruz
13:11 04 Apr 18
I was nervous about bankruptcy, but from the moment I stepped in your office I felt at ease. This process was so easy with your help, that yesterday I was talking to my coworkers about it and recommending your firm to them. You make something that’s scary seem easy and I thank you so much for helping me!
Valerie Nesbitt
Valerie Nesbitt
14:51 03 Apr 18
Sadek and Cooper have been excellent. Everyone has been extremely helpful and patient. The lawyers I have worked with, Matt and Brad, are extremely knowledgeable. I felt very comfortable with them handling my case.
Marlena Lucas
Marlena Lucas
16:08 02 Apr 18
Very simple. Any time I had questions, they were answered quickly. The lawyers are just great. Just a fast painless process.
James Smith Sr
James Smith Sr
13:19 14 Mar 18
Everything has been great. Really awesome job with my case... You and your staff have done a perfect job in my opinion.
Michkel Davis
Michkel Davis
17:02 09 Mar 18
Mr. Sadek was the best and most thorough lawyer I’ve ever met. He’s very human and caring about our case. His whole staff is great too. Highly recommend...
Tamika Richardson
Tamika Richardson
14:56 01 Mar 18
My bankruptcy went very smoothly with your firm. No issues. You are all very nice. That’s why I recommend my sister to your firm and your now helping her too! Thanks again.
Geraldine Ross
Geraldine Ross
14:14 28 Feb 18
This is an Excellent firm to work with; my questions were answered in a timely manner and I felt very supportive in handling my bankruptcy. I would highly recommend this firm to others who have found themselves in a position like mine.
Lavern Baker
Lavern Baker
17:03 23 Feb 18
You are all super lawyers. Brad and Matt made me feel comfortable. Every one in your office so nice and just made it easy. You’re the best!
peter b
peter b
19:42 21 Feb 18
Thank you, Sadek and Cooper Law offices for your dedication on my behalf. I appreciate Matthew and Patrick and your staff and all that everyone did to support me in this legal matter. You took an embarrassing, sad experience, for me, and turned it into a successful solution without all the emotional pain expected. After dealing with a loan modification company for over eighteen months without going to an attorney first that is the biggest mistake anyone can make. The Modification Companies set out to sell you lies, broken promises and dilute the homeowner's assets with no knowledge of any kind of law. I can't stress enough stay away from Modification companies, as a Military Veteran and family man, protect you or your family best interest. Go directly to Sadek and Copper you will not regret it! This firm moves with Super speed and diligence protecting you and your family's the entire process, even after watching some of these other attorneys in the courtroom appearing to mishandled their clients’ cases before the Trustee. You made it easy and I’m finally getting my financial life back on track! Thank you for your prompt replies to me, your clear information and preparation needed when at the courthouse. I would of course recommend you to others and I am glad you were the one who had my case. Kind genuine law firm who treats you like family. God bless you all and I pray for your continued success in your field of expertise. This firm is Super Lawyers for a reason. They are the best at what they do! Pete
Doug Tinlin
Doug Tinlin
06:55 15 Feb 18
Brad Sadek gave me hope when he decided to handle my mortgage for enclosure defense. I had exactly 10 days left of the 30 days ultimatum given me, but he was able to bargain for an extra 30 days for me to pay up. That duration turned out just right.
Jacinth Jacinth
Jacinth Jacinth
16:07 31 Jan 18
Excellent service. Brad and Matt were outstanding and friendly. They helped me through this. I’ve never met attorneys like these. Thank you!
julie njoku
julie njoku
12:29 24 Jan 18
Brad Sadek is excellent!. He understands and he's fair. You feel like you have someone fighting for you. The staff is friendly, professional, and courteous. These guys are the best at what they do !
Owen Black
Owen Black
20:14 09 Jan 18
Thanks for the great service! I would recommend this firm highly. Throughout the years I have been helped by this firm greatly and very much appreciated.
Steven Rychalsky
Steven Rychalsky
15:30 09 Jan 18
Sadek and Cooper law office was a wonderful experience to work with. Bankruptcy is a difficult experience but they helped with the stress so much and made it easy. I would recommend Sadek and copper too anyone.
Chris Kourelias
Chris Kourelias
19:09 28 Dec 17
Working with both Brad & Matthew was a pleasure. Both gentlemen are extremely knowledgeable and helpful in providing me the right assistance needed to make the correct decision to benefit me in the long run. I would recommend both candidates to anyone looking for assistance with a reputable law firm.
Jennyfer Santana
Jennyfer Santana
21:17 21 Dec 17
Highly Recommended. Matt & Brad assisted with my case. I felt comfortable throughout the entire process. Matt was very understanding, patient, and ensured he answered all my questions! Both great guys and very friendly! It was a pleasure working with Matt and Brad.
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