Free Consultation
The office is open as per the NYS Covid-19 guidelines. We are now doing both in-person and telephone consultations. Please call the office at 718-855-6840 to schedule a time to speak with one of our experienced bankruptcy attorneys.

What Is a Waiver of Discharge and Why Would Anyone Want One?

If a creditor claims that someone who is about to file New York bankruptcy has waived his or her right to discharge the debt, its claim will almost certainly be rejected. Anyone who signs a form promising to not discharge a debt is probably going to be protected by the law. It would defeat the entire point of the Bankruptcy Code, which is to allow people to deal with debts they cannot pay off.

However, it is possible for debtors to voluntarily waive their rights to a discharge. The Bankruptcy Code allows this in Section 727(a)(10). The waiver must meet a few requirements.

(1)  It must be in writing. This point makes sense given that the discharge is a right given the debtor in bankruptcy. Oral statements or even declarations in court will not pass muster.

(2)  The waiver must be executed by the debtor, meaning he or she must sign it. This way the court knows that the debtor understood the waiver.

(3)  The waiver must be signed after the debtor files bankruptcy.

(4)  Finally, the bankruptcy court must approve the waiver. Sometimes the court will hold a hearing with the debtor present to ensure that he or she understands the consequences of waiving a discharge. Even so, the court might still decline to approve the waiver if it believes it would harm the debtor or ultimately not be in the debtor’s best interests.

The second question in this post’s title, of course, screams for an answer: Why on earth would anyone want to waive their rights to a discharge?

It usually only occurs when a debtor realizes that the bankruptcy court won’t grant a discharge for some other reason, but the debtor still wants the liquidation (or even the repayment plan) to proceed instead of the court dismissing the case. Sometimes the trustee uncovers some kind of fraud or another act that might jeopardize the case, or worse, lead to an investigation by the U.S. Trustee or the Department of Justice. The bankruptcy trustee might strike a deal with the debtor to allow the case to proceed without referring the case to other government agencies.

For the most part though, waiving a discharge severely limits the debtor’s rights and benefits from bankruptcy. It should not be done without discussing the situation thoroughly with a New York bankruptcy lawyer.

For answers to more questions about bankruptcy, the automatic stay, effective strategies for dealing with foreclosure, and protecting your assets in bankruptcy please feel free to contact experienced bankruptcy law changes Bruce Weiner for a free initial consultation.

Rosenberg, Musso & Weiner, L.L.P
26 Court St # 2211
Brooklyn, NY 11242, USA
718-855-6840
http://nybankruptcy.net/

Recent Posts

Beware Grace Periods, Debtors

Too often, debtors see grace periods offered by lenders as free benefits. “Grace” makes it sound so innocent. However, debtors who routinely rely on grace periods when making payments will find themselves facing financial difficulties that might lead to bankruptcy. The reason is that although creditors offer grace periods to debtors, they also use them

Read More »

Bankruptcy May Not Rescue You From Vicious Personal Disputes

Bankruptcy is a technical process that assumes everyone working within it is mostly rational. To the extent that it expects parties to deviate from irrational behavior, the Bankruptcy Code and its accompanying rules include incentives to keep parties in line. Creditors are usually large and impersonal, and they rarely care if their debtors file bankruptcy.

Read More »

Non-Lawyers’ Explanations of Bankruptcy May Be Wrong

Do you have financial problems? Do you tend to ask your friends for advice? Is one of your friends an experienced New York bankruptcy lawyer who will explain the process for you? Are your friends otherwise knowledgeable people? The answer to these questions may be, “Yes but you don’t know it.” Although many bankruptcy lawyers

Read More »

6 Steps to Take Before Filing Bankruptcy

Leaving your case to an experienced New York bankruptcy lawyer is not the only step on the to-do list before filing bankruptcy. There are many things debtors should do (and not do) before they file, and the more organized and mindful debtors are, the easier the process will be and the more effective the result.

Read More »

Social Security Number Not Necessary for Bankruptcy

A question that’s commonly asked about New York bankruptcy is whether a debtor needs a Social Security number to file. Debtors ask because they sometimes run across the bankruptcy form title, “Your Statement About Your Social Security Numbers” (B 121), which asks debtors to list their current and prior Social Security numbers. The new bankruptcy

Read More »

How Can a Debtor (or Creditor) Get a New Trustee?

The trustee in a New York bankruptcy case is usually not the debtor’s ally. His or her purpose is mainly to administer the bankruptcy estate or ensure the debtor’s repayment plan goes according to plan. Trustees pursue preference payments, fraudulent conveyances, and other malfeasance committed by debtors. They frequently initiate adversary proceedings against debtors. In

Read More »
Scroll to Top