Robert Manchel

The fifth reason for an objection to a chapter 7 discharge is the failure to explain the loss or the deficiency of an asset.
This objection is very similar to the prior objections relating to the debtor’s intentions and veracity. Typically, this objection concerns a debtor who previous owned valuable assets, included cash, which have either substantially dissipated in value, or  are no longer owned by the  debtor.  If a creditor established that the debtor owned certain assets, the debtor should provide a reasonable explanation as to the reduction in the value or the transfer of the asset.
Although the objecting party may include this as an additional ground for the denial of a discharge, typically the objecting party will not focus on this issue.  Also, in deciding such issues, the court is hesitant to withhold a discharge, based on the debtor’s poor judgment.
Attorney Robert Manchel, a New Jersey bankruptcy practitioner, may be contacted at 1 (866) 503-5655.

Any debtor who commits fraud, testifies falsely, withholds records, etc. will be denied a discharge. This includes the false information provided on the bankruptcy petition, as the information is sworn to under oath. However, typically a debtor will only be denied a discharge if the false oath relates to a material matter of the case and has an impact on the creditors and the bankruptcy estate. Also, typically, for the denial of a discharge, the falsity must be intentional and not based on carelessness or mistakes.
Typically, fraud committed in connection with a particular debt or creditor will result in the exception of that particular debt from discharge and not the entire bankruptcy case.  For example, an individual who is extended credit based on false information, at the time of the loan, will not be permitted to discharge that debt at the time of the bankruptcy filing.  Typically, such fraud will not result in the denial of the discharge of all debt included on the petition.
Also, the fraudulent act of one debtor does not necessarily effect the dischargeability of the joint debtor’s debt,  in a joint filed bankruptcy case. If one joint debtor failed to include an asset on the petition, in which the joint co-debtor was unaware of, the co-debtor’s right to a discharge will be unaffected.
You may contact Robert Manchel, a bankruptcy practitioner in NJ, at 1 (866) 503-5655.
 

Another reason for the denial of a chapter 7 discharge is the unjustified failure to keep books or records as to finances.
The bankruptcy code indicates that a debtor will be denied a discharge if he “concealed, destroyed, mutilated or falsified, or failed to keep or preserve any recorded information” regarding his finances, unless such act or failure was justified under the circumstances.
This objection is typically unsuccessful against a consumer debtor that is an employee, as the debtor’s financial picture may be established by copies of pay stubs, bills, credit reports, etc. Also, it is typically not unreasonable for an individual consumer to not keep detailed records of his finances. The courts understand that individuals will likely only keep copies of their  bills, receipts, canceled checks, etc. Although very unusual, the court may deny a consumer’s discharge if the consumer’s records are so deficient that the court or other parties cannot ascertain an accurate picture of the consumer’s financial affairs.
This objection typically relates to an individual who owns a small business. A small business owner should be able to provide sufficient records to the court that provides at least a close estimate of the amount of their businesses’ receipts and expenses. This may possibly be accomplished by Profit and Loss Statements. However, the trustee may request additional proofs such as work contracts and receipts for supplies.
Robert Manchel is a New Jersey Bankruptcy Attorney and can be contacted at 1 (866) 503-5655 to answer any of your questions regarding Chapter 7 Discharge or other bankruptcy related topics.

Probably, the most common objection to discharge is that the debtor has intentionally transferred or concealed an asset from the bankruptcy estate and/or creditors. The objector must prove that the debtor acted with the intent to hinder, delay or defraud a creditor and/or the bankruptcy estate.  If the objector cannot prove this specific intent, the objection will be denied.
The following are considered assets: house; car; furniture; etc. The facts concerning whether the debtor intentionally concealed an asset is typically easier to prove, as compared to the intent to defraud a creditor by way of the transfer of an asset.
Every debtor must list any and all assets on his bankruptcy petition, no matter the value.  The  failure to disclose a very valuable asset on the petition and at the bankruptcy hearing, would certainly be considered an important fact, when considering the debtor’s intent to conceal an asset.
One can transfer an asset by various means, such as by sale, gift, etc.  Certain illegal transfers may be obvious, such as selling a $50,000 car for $200.00 the day before the bankruptcy filling. However, the fraudulent intent regarding other transfers may be less obvious, such as a depleted a bank account prior to a bankruptcy filing.
If you need assistance from a bankruptcy lawyer in NJ, Robert Manchel can be reached at 1 (866) 503-5655, to discuss any questions that you may have regarding your individual case.

This is one of a twelve blog series explaining how a chapter 7 debtor may be denied a discharge.
Under certain circumstances a debtor may be denied a discharge. The bankruptcy code states numerous reasons why a debtor may be denied a chapter 7 discharge.
A bankruptcy discharge, eliminates all types of debt that may be discharged in a bankruptcy case, such as credit card debt, medical bills, and other unsecured debt.
Any living person filing a bankruptcy case, that is entitled to a discharge, is able to obtain a discharge. However, if the entity filing the bankruptcy case is not a living individual, the entity is not entitled to a discharge.  In other words, a corporation, limited liability company, or partnership that files for chapter 7 bankruptcy protection is not entitled to a discharge. If such an entity files a bankruptcy case, the trustee will administer the case, which may include the sale of assets. After the case is fully administered, the case is closed, with no entry of a discharge order.
After completion of the case administration, there is nothing left of the entity. Even though a creditor may legally sue the entity after the completion of the case, the suit would be futile, as the entity is worthless.
New Jersey bankruptcy attorney Robert Manchel may be reached at 1 (866) 503-5655, to discuss your chapter 7 bankruptcy issues.