For most bankruptcy petitioners, the time period between when they file and when their bankruptcy is discharged is long but worth it. However, occasionally, missing or inaccurate information prolongs the process and leads to increased frustration and anxiety. For those individuals, the day when their bankruptcy is finally discharged is a cause for celebration. Unfortunately for some, that day never arrives.
For petitioners found to have purposely omitted or lied about financial information when filing, their bankruptcy discharge may actually be denied. While this situation is not common, it does happen. For those in fear of losing property to their creditors during bankruptcy, concealing assets may seem like a good way to protect them from being seized. However, hiding, destroying or transferring property in an attempt to keep it after bankruptcy, is unlawful, and can lead to petitioners not only losing non-exempt property to creditors but also to them not being relieved of their debt through discharge.
When a bankruptcy discharge is denied, the process itself doesn’t just stop. Trustees continue to liquefy non-exempt assets to pay creditors. The automatic stay that petitioners are given during bankruptcy is then over, and creditors can resume collection activity.
Bankruptcy is designed to help struggling individuals receive a fresh financial start. The bankruptcy court allows petitioners to keep important property after bankruptcy through exemptions. For most petitioners, the exemptions allowed by state or federal law are more than adequate to protect their important assets from creditors. With the help of an attorney, petitioners can keep property and assets safe without resorting to risky tactics to do so. Individuals that honestly disclose all financial information to the bankruptcy court are not at risk for denial of discharge. Those that try to conceal or omit information are at risk.