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Protecting Your Right of Discharge

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Before the deservedly unpopular 2005 reforms to the Bankruptcy Code, it was rare that an innocent mistake could cause your discharge to be denied or revoked. It used to be that trustees and the courts reserved this harsh measure for those situations where it was clear that a person filing for bankruptcy had engaged in serious, persistent and intentional misbehavior. Now, in the aftermath of the reforms, it is even more important than ever to hire a competent bankruptcy attorney to help you navigate a bankruptcy filing, not just because the reforms made declaring bankruptcy much more complicated, but also because a mistake could cause your discharge to be revoked or denied. And what's the point of declaring bankruptcy if you don't get your debts discharged? That bankruptcy isn't going to help you at all, probably, and it will almost certainly hurt you.

There are several situations you must be on the lookout for to avoid having your discharge denied or revoked. First of all, under the reforms, a prerequisite for receiving the discharge is the completion of a financial management course. This course is one hosted locally in your area and approved by your bankruptcy case trustee. You will only be exempted from completing this course if a good one isn't available nearby. Although the educational value of these courses is questionable, all debtors must fulfill the requirement or forfeit their discharge.

The bankruptcy trustee can demand a great deal of information from you over the course of your bankruptcy. One of the more onerous demands is the production of your last four years of tax returns. If the Trustee demands the returns and you fail to produce them, your discharge could get dismissed outright. If you're bothered by this requirement, well, who can blame you? It seems like your tax returns are private financial information that should remain so, even during bankruptcy. There is a little bit of latitude for protecting your privacy: you can opt to send transcripts of the returns (also known as summaries) instead of the full filings; these contain less personal information. Avail yourself of this option by requesting summaries from the IRS.

And we're not done yet! If you're filing for bankruptcy under Chapter 13 and you owe child support or alimony, it's time to get caught up. In order for your debts to be discharged at the end of the process, you must be completely up to date on your support payments. The good news is that if you are behind, the arrears can be caught up in your Chapter 13 plan. Your ongoing payments must continue to be paid over the course of your bankruptcy. It would be a real shame to get to the end of the process, having made all of the required plan payments, only to have a problem because you missed a few support payments along the way. Protect your discharge by paying these on time.

Finally, it should hardly need to be stated that you must tell the truth and avoid fraudulent activity during your filing. Remember that even if your intention isn't to commit fraud, an innocent mistake could be interpreted as such if the effect is to obscure some part of the process or misrepresent your position in any way.

With all of these potential quagmires, it's imperative that you consult with an experienced bankruptcy attorney. In North Carolina, contact the Law Offices of John T. Orcutt- helping families since 1985. 1-888-234-4181.

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