A debtor may be denied a discharge if he refuses to comply with a direct order of the bankruptcy court.
Please note that it is very unusual for a debtor to be denied a discharge under this code section. Typically, to deny a debtor a discharge, the failure to comply with the court order, must include some kind of fallacious intent, together with an effect on the ability to administer the estate or obtain property of the estate.
Typically, a debtor will be denied a discharge, under this section, if he refuses to turnover bankruptcy estate property to the court, or disclose the whereabouts of certain property of the bankruptcy estate. In certain situations, a debtor may be required to turnover property that he believed would not be taken by the court or trustee. Or, there may be a situation when the debtor innocently used or sold certain property that he did not know is part of the bankruptcy estate. This most likely occurs, when the debtor is not properly counseled by his attorney.
It is possible that a debtor may be denied a discharge for failure to testify about a matter that is important to the case. However, in this situation, depending on the circumstances, the debtor may not be denied a discharge, if his refusal was due to his evocation of his privilege against self incrimination.
NJ bankruptcy Attorney Robert Manchel can be contacted at 1 (866) 503-5655.