When most people file for bankruptcy, they assume it's very much a file-it-and-forget-it type of situation where a judge will approve their request for debt relief. However, it's not. Instead, filing for and having your bankruptcy discharge request approved may not happen if the trustee in your case has reason to suspect you were untruthful in listing your earnings, assets or debts.
In filing for either Chapter 7 or 13 bankruptcy, debtors are required to list all of their assets, each of which stands to be liquidated by the trustee to pay toward an individual's outstanding debts. As a result, in filing out your bankruptcy paperwork, the court requires full disclosure of all assets that can potentially be used for this purpose.
If the trustee, as the presiding authority over bankruptcy proceedings is known, senses that you have not been up front in disclosing your assets, future earning prospects, or debts, then he or she may elect to deny your request for relief through bankruptcy. Additional reasons a claim may be denied include: destroying financial records, hiding property, failing to document having received bankruptcy relief previously, or not completing the required debtor courses as well.
If a denial of your bankruptcy request is pending, the trustee in your case will file a document with the court enumerating how the details of your specific case violate the country's bankruptcy laws. This notice will be either mailed or served on you, the debtor, by a process server. You then have 30 days to respond to the accusations.
A debtor not providing an adequate response to questions results in an automatic ruling in favor of the lender. At the same time, if you file a response, the matter will later be heard in open court and decided on by the judge in your bankruptcy case. If it's believed that you intentionally lied or destroyed financial records in an effort to strengthen your case for bankruptcy, then your case may be turned over to the Department of Justice for potential criminal prosecution purposes.
If you are currently considering filing for bankruptcy relief and you want to ensure you do everything within your power to ensure that your claim does get denied and that you're not held criminally liable for potential omissions, then working with an experienced Knoxville, Tennessee, bankruptcy attorney can provide you with necessary guidance as to how to address your legal matter.
Source: TheBalance.com, "Can your bankruptcy discharge be denied?," David Haynes, accessed April 17, 2017