CHAPTER #38 Do You Ever "Not Get" a Discharge

Sometimes. You have to wait a certain amount of time between bankruptcy filings. Sometimes we will file a Chapter 13 even if you cannot get a discharge if you have filed previous cases under certain circumstances. You will need to know the date you filed your prior case, what Chapter, and if a Chapter 13 what the % to unsecured creditors was, and whether or not you received a discharge, or had a bar order or order from relief from stay.

If you have not filed a previous case, Chapter 7 will discharge all honest debt. It will not discharge student loans, marital and support obligations, recent taxes, fraud, tickets and fines, willful injuries such as intentional tort judgments, and won't get rid of liens on property. The same in Chapter 13, unless you pay those debts in a Chapter 13.

Also, creditors can object to your discharge. Some grounds are fraud and breach of fiduciary duty.

The purpose of a consumer Chapter 7 or 13 is to reorganize your debt. Most of the time you pay only the part you want to, or have to pay.

Sometimes, there is no debt you want to pay. In any case, people often say, "This sounds so easy. There must be a catch to it."

Things usually work out as I have set forth in this book. There are exceptions. The Bankruptcy Code states that you can be denied a discharge of your debt. The most common reasons are lying on your bankruptcy petition, or "abuse" of the Bankruptcy Code by hiding or transferring assets, or by running up the credit cards with the intent to cheat creditors.

Geraci Law has represented thousands and thousands of debtors, in both Chapter 7 and Chapter 13 cases. I have had a few cases in which a Court denied a discharge. So, in my experience, your chances of "not getting" a bankruptcy discharge, are about 1 in 100,000, and it would usually only be because you did not co-operate, or you lied.

Don't worry about not getting a discharge. We tell you up front if we notice anything unusual. Bankruptcy is very predictable, it is very calm, and there is very little emotion involved. Only if you are one in ten thousand will you not get a discharge.

Of course, individual debts such as newer student loans are by their nature, according to the law, not dischargeable. But you will know what debts are not dischargeable before you start.

So, don't worry about not getting a discharge of debts. It can happen, but when you think about it, since it is so rare, even if it happens there is a lot of good in filing. It is not a primary concern in our office.

The United States Trustee can object to your discharge in a Chapter 7 if they feel you are abusing the bankruptcy laws by an improper filing, or if you have income after expenses that can be used to pay creditors. We have only seen this happen once or twice. We have successfully rebutted presumptions of "abuse" in hundreds of cases, and it only usually comes up when you have little secured debt, and income far over the median income listed by the IRS for your zip code. We know how to handle those cases, since a large part of our practice is high income household making over $70,000 per year.