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The objective of filing a bankruptcy petition is to obtain a discharge in bankruptcy. The discharge means that no creditor may, in the future, make any effort to collect the debts that have been discharged. If a creditor, whose debt was discharged in bankruptcy, tries to collect after the debtor has filed for bankruptcy or been discharged, and after the creditor has been notified of the discharge, the creditor may be found to have violated the automatic stay or the order of discharge and they may be sanctioned. The issuance of the discharge is usually automatic but in certain cases the court may deny it for a number of reasons. The discharge may be denied if: • The filing fee has not been paid in full. • The debtor has failed to complete both an approved credit counseling and personal financial management course. • The debtor fails to comply with directives of the trustee or orders of the bankruptcy judge. • The debtor fails to list all of their creditors. • The debtor concealed, destroyed or transferred property with the intent to hinder, delay or defraud within one year before the bankruptcy petition was filed or after filing. • The debtor intentionally concealed or destroyed records of financial dealings unless they can show a good reason for doing so. • The debtor lied under oath at the First Meeting of Creditors or any other court hearing. The discharge is the debtor's alone and it does not affect anyone else's obligations. If someone co-signed for one of the debts, the discharge will not eliminate the co-signer's liability. Unless the debtor has agreed to pay the debt in full, the creditor may pursue the co-signer. If one spouse files for bankruptcy and the other does not, the spouse who did not file will still be liable for any joint debts.
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The Discharge
Part 1 of 2