My Discharge Was Denied! Now What?
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.