Dismissal of your bankruptcy case is different from a denial of discharge. A dismissal is the court ending your case. Usually a case is dismissed when the debtor fails to do something he/she must do, such as attend the creditors’ meeting. A denial of a discharge is very different and does not dismiss the case; it is a specific order that denies the debtor a discharge of any and all debts in the entire case.
There are many reasons that a bankruptcy court may deny your Chapter 7 discharge, but there is one common denominator: you have done something very wrong during the bankruptcy process. Section 727(a) of the Bankruptcy Code lists reasons that you can be denied a discharge, including:
• transfer or concealment of property with intent to hinder, delay, or defraud creditors;
• destruction or concealment of books or records; perjury and other fraudulent acts;
• failure to account for the loss of assets; and
• violation of a court order.
The court order denying your discharge does not dismiss or terminate your bankruptcy case. The Chapter 7 trustee will continue to liquidate any of your non-exempt assets, but you lose your opportunity to discharge your debts.
A denial of discharge can have lasting consequences. When you are denied a discharge, section 523(a)(10) of the Bankruptcy Code denies a discharge in future Chapter 7 cases of any debt that was or could have been scheduled in your prior bankruptcy. In plain English: if you are denied a discharge in your first bankruptcy, all those debts can never be part of a discharge in a future Chapter 7 case.
However, it is possible to discharge those debts in a Chapter 13 case. Section 1328 does not enumerate the disqualifying provisions of 523(a)(10) among the list of exceptions to a Chapter 13 discharge. If you need bankruptcy relief and have been previously denied a discharge, speak with an experienced attorney to review your bankruptcy options.
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Nachawati Law Group represents parties in mass tort litigation, businesses and governmental entities in contingent litigation, and individuals in complex personal injury litigation. For more information, visit contact or call 214-890-0711.
