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Bankruptcy Denied for Failure to Obey Court Orders of Trustee

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When a debtor files for bankruptcy, they must obey court orders and instructions by the Trustee who oversees the case for the Court.

An example of what happened to one debtor is provided below:

A debtor wanted to gain repossession of his car so he wrote a check in the amount needed to regain possession of his car.   The day after writing the check, the debtor filed for Chapter 7 bankruptcy.  However, the check had not cleared and was still in the debtor’s bank account on the date of filling.  As such, the check was ordered to be turned over to the Trustee since the money was not claimed as exempt.

Additionally, the debtor was ordered to turn over a tax refund to the Trustee.  Debtor refused when the Trustee reminded the debtor that the money written for his car and the Income Tax refund were to be turned over to the Trustee.   The Trustee made it clear to the Debtor, that if the Debtor did not comply with the Orders, he would file an objection to the discharge in Bankruptcy Court.

The Bankruptcy Court ruled that, although the Debtor was aware of the Orders, there was no suggestion in his excuses that he failed to obey the order due to inadvertency, mistake, or inability to comply.  Rather, the Debtor’s choices were deliberate and intentional.

The Bankruptcy Judge ruled that the Chapter 7 Bankruptcy Petition be denied and, therefore, no discharge granted.

You must work with the Court and the Trustee when you come for relief from your debts.   If the Debtor had been represented by an attorney, that attorney would have directed him to abide by the Court Orders; however, it appears that the debtor felt he knew best when handling his own Bankruptcy Filing.