IAAL -- Under what circumstances is discharge denied?

Hey IAAL & any other attorneys, I could use a practice tip.

FACTS: B has filed chapter 7. B could pay off all secured debts within 3-5 years under chapter 13, if the unsecured debts were discharged, but it would be a stretch. B does not meet the criteria for dismissal under 707 nor for denial of discharge under 727. At the creditor's meeting, the trustee strongly urged B to consider converting to chapter 13.

ISSUE: Can the court deny B's chapter 7 discharge to force B to convert to chapter 13? Would such a denial require the court to note up a hearing first? In other words, can a court deny discharge for reasons NOT listed in 727?

Thanks,
Tracey

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This is not legal advice and you are not my client. Double check everything with your own attorney and your state's laws.

[I AM ALWAYS LIABLE]

<BLOCKQUOTE><font size="1" face=" Arial, Verdana, Helvetica">quote:</font><HR>Originally posted by Tracey:
Hey IAAL & any other attorneys, I could use a practice tip.

FACTS: B has filed chapter 7. B could pay off all secured debts within 3-5 years under chapter 13, if the unsecured debts were discharged, but it would be a stretch. B does not meet the criteria for dismissal under 707 nor for denial of discharge under 727. At the creditor's meeting, the trustee strongly urged B to consider converting to chapter 13.

ISSUE: Can the court deny B's chapter 7 discharge to force B to convert to chapter 13? Would such a denial require the court to note up a hearing first? In other words, can a court deny discharge for reasons NOT listed in 727?

Thanks,
Tracey

<HR></BLOCKQUOTE>


My response:

The debtor may convert an involuntary Chapter 7 petition to a voluntary Chapter 11, 12 or 13 case at any time. This allows the debtor to remain in possession and control of its assets (unless a trustee is appointed for cause). [See 11 USCA § 706(a)]

IAAL




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By reading the “Response” to your question or comment, you agree that: The opinions expressed herein by "I AM ALWAYS LIABLE" are designed to provide educational information only and are not intended to, nor do they, offer legal advice. Opinions expressed to you in this site are not intended to, nor does it, create an attorney-client relationship, nor does it constitute legal advice to any person reviewing such information. No electronic communication with "I AM ALWAYS LIABLE," on its own, will generate an attorney-client relationship, nor will it be considered an attorney-client privileged communication. You further agree that you will obtain your own attorney's advice and counsel for your questions responded to herein by "I AM ALWAYS LIABLE."

Guess I didn't state the issue very well. This is why I'm not a professor like you!
B wants to obtain ch. 7 discharge of *all* debts but is worried that the court may try to force B to convert to ch. 13 and pay off the secured debts by denying the ch. 7 discharge. Is it possible the court might do this? Likely?

------------------
This is not legal advice and you are not my client. Double check everything with your own attorney and your state's laws.

[I AM ALWAYS LIABLE]

<BLOCKQUOTE><font size="1" face=" Arial, Verdana, Helvetica">quote:</font><HR>Originally posted by Tracey:
Guess I didn't state the issue very well. This is why I'm not a professor like you!
B wants to obtain ch. 7 discharge of *all* debts but is worried that the court may try to force B to convert to ch. 13 and pay off the secured debts by denying the ch. 7 discharge. Is it possible the court might do this? Likely?

<HR></BLOCKQUOTE>


My response:

I was, at first, under the impression, that the debtor wanted to change to Chap. 13.

I have never heard of such occurrance as you state; however, that doesn't mean that a Federal judge hasn't tried. The only scenario that I can envision where this would happen is, on recommendation of the Trustee, when a debtor has been "forced" into BK by at least two or more creditors, with each more than $5,000.00 in claims, who have petitioned the court for a conversion. In that instance, I believe a court would be inclined to have the debtor attempt to pay "something" to the creditors, up to the 5-year maximum. But even then, such an order is not guaranteed, depending on the debtor's particular circumstances and future abilities, subject to constant review by the Trustee. Apparently, involuntary Chapter 7 filings against individual debtors may not be converted to Chapter 13 without the debtors' consent. [See In re Graham (BC ND IA 1982) 21 B.R. 235; In re Brophy (BC HI 1985) 49 B.R. 483] Thus, if there is a reasonable possibility of confirming a reorganization plan (including a liquidation plan), it may be preferable for creditors to file an involuntary petition under Chapter 11 (rather than Chapter 7).

I hope this answers your question, and it's always great to hear from you.

IAAL


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By reading the “Response” to your question or comment, you agree that: The opinions expressed herein by "I AM ALWAYS LIABLE" are designed to provide educational information only and are not intended to, nor do they, offer legal advice. Opinions expressed to you in this site are not intended to, nor does it, create an attorney-client relationship, nor does it constitute legal advice to any person reviewing such information. No electronic communication with "I AM ALWAYS LIABLE," on its own, will generate an attorney-client relationship, nor will it be considered an attorney-client privileged communication. You further agree that you will obtain your own attorney's advice and counsel for your questions responded to herein by "I AM ALWAYS LIABLE."



[This message has been edited by I AM ALWAYS LIABLE (edited June 15, 2000).]