The Most Effective Way to Discharge Debt – Be Honest with Creditors

In a Chapter 7 liquidation bankruptcy proceeding, you have the right to discharge certain debts in exchange for the sale of non-exempt property. That right, though, is not absolute. If there’s evidence that you have been less than forthright with the bankruptcy court, or that you have engaged in wrongful conduct, the bankruptcy court has the power to deny a petition for discharge. Here are some of the situations where your Chapter 7 discharge petition may run into problems.

Dishonesty in Obtaining Debt

If you incurred debt through false pretenses, through fraud or misrepresentation, or through illegal acts, that debt may not be subject to discharge. For example, if you embezzled $100,000 from your employer, but spent the money, you cannot file for bankruptcy protection to discharge the restitution requirement. Likewise, if you obtained credit cards or consumer loans through fraud or misrepresentation, including the falsification of income or debt, the creditor to whom you owe that money may ask the bankruptcy court to deny discharge.

Another way to lose the right to discharge debt is to fail to disclose income or debt during your bankruptcy proceeding, or to otherwise mislead or lie to the bankruptcy court. You must fully disclose all information about the assets, debts and income, and ignorance will typically not be an acceptable defense. Hire a bankruptcy attorney, tell your attorney the truth about everything, and you’ll be fine.

Contact Neuner & Ventura, LLP

At Neuner & Ventura, LLP, we know that the bankruptcy process can be intimidating and confusing. We offer a free initial consultation to every client. For an appointment, call our office at 856-596-2828 or send us an e-mail. We do, however, reserve the right to charge a fee to review any work done by another attorney. Evening and weekend appointments are available upon request.

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