The Bankruptcy Discharge in Utah:
For those filing Chapter 7 bankruptcy in Utah the final goal is to have their debts discharged and to keep all nonexempt property.
A discharge is designed to relieve debtors of personal liability for most debts and prevents creditors from taking any action to collect from the debtor after the bankruptcy case is completed. While a discharge is subject to many exceptions, individual debtors receive a bankruptcy discharge in nearly all Chapter 7 bankruptcy cases. However sometimes a creditor or other interested party files a complaint objecting to the bankruptcy discharge or files a motion to extend the time to object, the bankruptcy court will issue a discharge order relatively quickly, usually within 60 to 90 days after the date first set for the meeting of creditors.
A court can deny a bankruptcy discharge in Utah for very limited reasons in a Chapter 7 bankruptcy case. Among such reasons are that the debtor failed to keep or produce financial records, failed to explain a loss of assets, committed a bankruptcy crime such as perjury, failed to obey a lawful order of the bankruptcy court, fraudulently transferred, concealed, or destroyed property that would have become property of the estate, or failed to complete a required financial management course.
Secured creditors, those having a perfected security interest in property belonging to the debtor, may retain some rights to seize property securing an underlying debt even after a discharge is granted. “Secured property” is property that serves as collateral on a debt. Usually, if a debtor wishes to keep secured property he or she must “reaffirm” the debt. A reaffirmation is an agreement between the debtor and the creditor that the debtor will remain liable for the debt even though the debt would otherwise be discharged in the bankruptcy.
Such reaffirmations must take place before a bankruptcy discharge is granted in a case. A written reaffirmation agreement must be signed by the debtor and filed with the court. All reaffirmation agreements must contain an extensive set of disclosures described with particularity in the Bankruptcy Code including the amount of the debt being reaffirmed, how the debt is calculated, and that by reaffirming the debt, the debtor’s personal liability for that debt will not be discharged in the bankruptcy.
When a person receives a discharge in a Chapter 7 bankruptcy case, a creditor of a discharged debt may no longer take any action against the debtor to collect a discharged debt. However, not all debts are subject to discharged in Chapter 7. Debts that are not able to be discharged in bankruptcy include debts for child support, certain taxes, certain government benefit overpayments, government guaranteed student loans, debts for certain willful and malicious injury caused by the debtor, debts for death or personal injury caused by the debtor’s operation of a motor vehicle while the debtor was intoxicated, and debts for certain criminal fines, fees, and restitution orders. The debtor will continue to be liable for these types of debts even after being granted a discharge.
Finally, even after the debtor is granted a bankruptcy discharge in Utah, the court may revoke that discharge upon the request of the trustee, a creditor, or the U.S. trustee if the discharge was obtained through fraud by the debtor, if the debtor knowingly and fraudulently failed to report the acquisition of property that should have been included in the bankruptcy estate or to surrender the property to the trustee, or if the debtor makes a material misstatement or fails to provide documents or other information in connection with an audit of the debtor’s case.
Clearly the goal in a bankruptcy case is a bankruptcy discharge in Utah. However this information outlined on this page is only a part of what you need to know if you are looking into bankruptcy and as always I recommend that you consult with an experienced bankruptcy lawyer.