Which of the following acts by a debtor would be grounds for a denial of discharge in a Chapter 7 bankruptcy?

Answer options:

Failure to keep or preserve adequate books and records.

Inability to pay debts as they become due.

Owing taxes to the IRS.

Filing for Chapter 7 bankruptcy 9 years after a previous Chapter 7 discharge.

How to approach this question

Distinguish between 'Non-dischargeable Debt' (specific debt survives) and 'Denial of Discharge' (NO debts are wiped out). Bad behavior (fraud, hiding records) = Denial.

Full Answer

A.Failure to keep or preserve adequate books and records.✓ Correct

A denial of discharge (meaning the debtor remains liable for ALL debts) occurs for bad acts, such as fraudulently transferring property, failing to keep books and records, or making a false oath. Specific debts (like taxes) being non-dischargeable is different from a general denial of discharge.

Common mistakes

Confusing non-dischargeable debts (student loans) with denial of discharge (bad acts).

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