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4. Objection of a New Jersey Chapter 7 Bankruptcy Discharge

Another reason for the denial of a chapter 7 discharge is the unjustified failure to keep books or records as to finances.

The bankruptcy code indicates that a debtor will be denied a discharge if he “concealed, destroyed, mutilated or falsified, or failed to keep or preserve any recorded information” regarding his finances, unless such act or failure was justified under the circumstances.

This objection is typically unsuccessful against a consumer debtor that is an employee, as the debtor’s financial picture may be established by copies of pay stubs, bills, credit reports, etc. Also, it is typically not unreasonable for an individual consumer to not keep detailed records of his finances. The courts understand that individuals will likely only keep copies of their  bills, receipts, canceled checks, etc. Although very unusual, the court may deny a consumer’s discharge if the consumer’s records are so deficient that the court or other parties cannot ascertain an accurate picture of the consumer’s financial affairs.

This objection typically relates to an individual who owns a small business. A small business owner should be able to provide sufficient records to the court that provides at least a close estimate of the amount of their businesses’ receipts and expenses. This may possibly be accomplished by Profit and Loss Statements. However, the trustee may request additional proofs such as work contracts and receipts for supplies.

Robert Manchel is a New Jersey Bankruptcy Attorney and can be contacted at 1 (866) 503-5655 to answer any of your questions regarding Chapter 7 Discharge or other bankruptcy related topics.

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