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Denial of discharge

The debtor can be denied a discharge of all of his debts if the court finds, after trial, that the debtor committed certain acts deemed incompatible with the "honest but unfortunate debtor".

Acts that may result in denial of discharge include transferring, concealing or destroying assets or financial records;  making a false oath on the schedules or under oath in the case; or failing to keep books and records from which the debtor's financial condition can be ascertained.  The complete list is found at 11 U.S.C.  727.

Denial of discharge affects the debtor's liability to all creditors, whether or not the debtor committed some fraudulent act with respect to that creditor.  

Denial of discharge doesn't stop the administration of the case, either. The trustee proceeds to gather and liquidate the assets of the estate, so the debtor loses not only the non exempt assets but any chance of ever discharging the debts in bankruptcy. 

Discharges are not denied lightly or easily.   This is intended as a penalty for debtors who deliberately try unfairly or dishonestly to thwart their creditors. 

Debtors who fully disclose their assets and their financial history should not worry about denial of discharge.

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