What happens if a debtor or a creditor doesn follow the bankruptcy rules?
The bankruptcy rules are very complicated. If a debtor fails to comply with the rules or makes misrepresentations to the bankruptcy court, the court may deny a discharge. Debtors have to be very careful to account for everything and to follow the bankruptcy rules. In the alternative, a bankruptcy court may simply dismiss a bankruptcy, meaning that the debtor would no longer be entitled to protection of the bankruptcy laws. A debtor could even be prosecuted criminally. Creditors are not immune, either. They may be subject to similar sanctions if, for example, they collude with the debtor to hide assets. A creditor can also get in big trouble with the bankruptcy court for violating the automatic stay. Return to index . . .
• The bankruptcy rules are very complicated. If a bankruptcy-debtor doesn’t follow them, or isn’t truthful with the bankruptcy court, the court may deny a discharge. Debtors have to be very careful to account for everything and to follow the bankruptcy rules. In the alternative, a bankruptcy court may simply dismiss a bankruptcy, meaning the debtor is no longer protcted by the bankruptcy laws. A debtor could even be prosecuted criminally. Creditors are not immune, either. They may face similar penalties if, for example, they scheme with the debtor to hide assets. A creditor can also get into big trouble with the bankruptcy court for violating the automatic stay.
