Can You Go to Jail if You Get Denied a Bankruptcy Discharge?

by Anna Assad

A bankruptcy court's discharge releases you from the debts included in it. Federal and state laws don't allow you to include some debts, such as federal taxes, on your discharge. While bankruptcy usually doesn't involve jail time, you may face a criminal sentence if your discharge is denied for an illegal action you took in relation to your case.

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Denial of Discharge

A court may deny your discharge or revoke a previously issued discharge if you've violated any debtor rules or haven't met all your obligations. Fraud, concealing or misrepresenting assets, destroying your financial records or lying to creditors or the court are all grounds for a denied or revoked discharge. Whether the reason for the denied discharge leads to criminal charges the debtor depends on the nature of the actions. Lying on your petition or to your trustee, for instance, is a federal crime that could lead to a jail sentence.