What Happens If the Bankruptcy Trustee Files an Objection to Your Discharge?

Find out what happens, and what you should do, if the bankruptcy trustee objects to your discharge.

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Under certain circumstances, the bankruptcy trustee appointed to administer your case may challenge your right to receive a bankruptcy discharge. If the trustee believes that you should not be entitled to a discharge, he or she will file an objection with the court and ask the judge to deny your discharge. Read on to learn more about what happens if the trustee files an objection to your bankruptcy discharge. (For more information on objections to discharge and other adversary proceedings in bankruptcy, see our topic area on Bankruptcy Procedures.)

What Is an Objection to Discharge?

A bankruptcy discharge eliminates your personal liability for (and obligation to pay back) most types of debt. But the bankruptcy trustee, the U.S. Trustee, and your creditors have the right to challenge your discharge if they believe that you should not be allowed to wipe out some or all of your debts in bankruptcy.

If a party in interest wants to challenge your discharge, it must file a written objection with the court and explain to the judge why you should not receive a bankruptcy discharge.

Reasons the Bankruptcy Trustee Might Object to Your Discharge

If you want to receive a discharge, you must be honest with the court and cooperate with the trustee throughout the entire bankruptcy process. The trustee will typically file an objection to your discharge if you:

  • lie on your bankruptcy papers or during your meeting of creditors (also called the 341 hearing)
  • hide, transfer, or destroy your property in order to defraud your creditors
  • conceal, destroy, falsify, or fail to keep records of your financial activities
  • fail to obey a lawful court order, or
  • otherwise commit bankruptcy fraud.

In addition, you can expect the trustee to file an objection if you are not legally entitled to a bankruptcy discharge. Bankruptcy laws place limits on how often you can file for bankruptcy and receive a discharge. This means that if you recently filed for bankruptcy and received a discharge, you may not be eligible for another discharge for a number of years. (To learn more about how often you can receive a bankruptcy discharge, see Filing for Bankruptcy Multiple Times.)

What Happens If the Trustee Objects to Your Discharge?

If the trustee wants to object to your discharge, he or she must file an adversary proceeding (a lawsuit) in your bankruptcy case and set forth the reasons why you should not be allowed to receive a discharge.

After the trustee files the objection, you will have a chance to respond to the complaint and explain to the court why you deserve a discharge. The court will then hold a trial and give each party an opportunity to present its case before deciding whether to grant or deny your discharge.

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An objection to discharge is essentially a lawsuit in bankruptcy court. To successfully oppose the trustee’s objection you must know how to conduct discovery, present evidence, and litigate the issues in court.

Further, the stakes are extremely high because if the judge denies your discharge, you will remain on the hook for your debts. For these reasons, talk to a knowledgeable bankruptcy attorney in your area right away if the trustee files an objection to your discharge.

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