Chapter 12 Discharge

Granting Discharge. The court will grant the individual and non-individual debtor (corporation, partnership, and LLC) that reorganize in a Chapter 12, a discharge when the debtor’s plan is completed. See also IRM 5.9.17.8, Discharge and Exceptions to Discharge and IRM 5.9.17.8(15), Table Showing Basic Discharge Information. BAPCPA has created two exceptions to Chapter 12 discharge for cases filed on or after July 1, 2005. In addition to completing plan payments, 11 USC 1228(a) requires that the debtor certify to the court that all payments due on "domestic support obligations" have been paid, except to the extent the plan does not require the payment of pre-petition domestic support obligations. Additionally, 11 USC 1228(f) precludes the granting of a discharge unless the court finds that after notice and a hearing held not more than ten days before the entry of the order granting the discharge, no reasonable cause exists to suspect the debtor of abusing the bankruptcy system or of being guilty of certain securities-related felonies or other misconduct described in 11 USC 522(q)(1) including:

Conviction of a felony that would demonstrate that the filing of the current Chapter 12 case was an abuse of the bankruptcy system

The debtor owes a debt arising from a violation of securities law

Fiduciary fraud

Racketeering

Crimes or intentional torts that caused serious bodily injury or death in the preceding five years