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Will my bankruptcy be approved?

Posted on Jun 2, 2009 in Chapter 13, Chapter 7

Clients often ask “Will my bankruptcy be go through?”  It’s a reasonable question.  The answer to this question could mean a lot of things.  Some people are wonder if they can file a case under chapter 7 or if they have to file a case under chapter 13.  We’ve written a lot about this before.

Often, people are really asking whether they will get a discharge in bankruptcy.  The general idea of bankruptcy is that an honest person gets a fresh start.  You can lose the chance to get a discharge in bankruptcy if you do something which the Bankruptcy Code considers bad.  You can also lose your discharge in bankruptcy if you don’t pay attention to details.

A discharge  is the most important benefit of filing a bankruptcy case.  A discharge wipes out most, if not all, of a debtor’s debts.  It also provides an injunction against creditors seeking to collect on those debts in the future.

Here are some of the things people do which result in loss of their discharge in bankruptcy:

  • transfer, remove, destroy, mutilate, destroy or conceal property within a year prior to the bankruptcy or during the course of the bankruptcy case with intent to hinder, delay, or defraud 
  • conceal, destroy, mutilatie, falsify or fail to keep books and records concerning business or financial affairs without justification
  • lie on papers, make a false claim, give a bribe, or withhold property, books or records from the trustee 
  • fail to explain loss of assets
  • fail to obey an order of court in a bankruptcy case
  • do any of the above things within a year prior to the bankruptcy case or in the bankruptcy case of a close family member or other insider
  • obtain a chapter 7 discharge within the past 8 years or a chapter 13 discharge within the past 4 years.
  • fail to take a financial management course within the prescribed period

Not only that, but a person’s discharge can be revoked under some circumstances if:

  • it is obtained by fraud; or
  • debtor obtains property which should be administered in bankruptcy but fails to disclose it; or
  • debtor fails to cooperate in a government ordered audit of his case

If you file a bankruptcy case, you must be honest and act properly.  If you don’t, you could lose your discharge. Worse, you could be fined and even imprisoned in a criminal prosecution.

So remember, an honest debtor gets a fresh start.  A dishonest debtor loses his discharge and faces criminal prosecution.


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