“Bankruptcy is an intricate process, and the debtor must fulfill certain duties. Failure to do so may lead to serious consequences.”
The question, What happens if you do not show up for bankruptcy court? often arises during discussions related to bankruptcy. The answer is multifaceted and depends on several variables, primarily the debtor’s adherence to bankruptcy duties and the trustee’s role.
Bankruptcy Discharge
The term ‘Bankruptcy Discharge’ refers to the elimination of debts through a bankruptcy filing. For first-time bankruptcy filers who have dutifully performed all their obligations, an automatic discharge typically occurs at the end of nine months.
Duties of a Bankrupt Debtor
A debtor is obligated to fulfill various duties during bankruptcy. These responsibilities range from reporting income and expenses to attending mandatory credit counselling sessions. Failure to complete these duties can obstruct the discharge process.
Role of a Trustee
In bankruptcy proceedings, a trustee plays a critical role. They manage the debtor’s estate and ensure all bankruptcy duties are fulfilled. If any duties are left undone, the trustee is required to object to the discharge.
Discharge Hearing
A discharge hearing is a bankruptcy court session that occurs if the debtor fails to complete their duties. The trustee presents the unfulfilled duties, and the Bankruptcy Registrar or Judge will decide the discharge conditions.
Failure to Complete Duties
Failure to complete all duties can lead to serious consequences. For instance, if a debtor with surplus income fails to make the required payments, the court may issue an order demanding those payments.
Effect of A No Order
If a debtor does not appear in bankruptcy court, the court may issue a “No Order”. This order allows the trustee to apply for their discharge, but the debtor remains bankrupt. Consequently, the debtor’s debts are not discharged.
Path Forward if Not Discharged
If a debtor is not discharged, they must contact their trustee to identify the remaining duties. Following this, they can request the trustee to apply to the court for their discharge.
Surplus Income
Surplus income refers to the income that exceeds a certain threshold set by the government. If a debtor has surplus income during bankruptcy, they are required to make additional payments.
Conclusion
To avoid adverse outcomes in bankruptcy proceedings, debtors should diligently complete all their duties and attend all necessary court sessions. If a debtor fails to do so, they may face severe complications, including the possibility of not being discharged from their debts.
