Q: What are the acts of debtor or grounds which
will prevent discharge?
A:
No discharge shall be granted, or if granted,
shall be valid, to the following cases:
1.
False swearing;
2.
Concealment of any part of his estate or
effects;
3.
Fraud or willful neglect in the care of his
property or in the delivery thereof to
the assignee;
4.
Procuring his properties to be attached
or seized on execution within 1 month
before
the
commencement
of
insolvency proceedings;
5.
Destruction,
mutilation,
alteration
or
falsification of his books, documents,
and papers;
6.
Giving
fraudulent
preference
to
a
creditor;
7.
Non
disclosure
of
the
assignee
of
a
proven false or fictitious debt within 1
month after acquiring knowledge;
8.
Being
a
merchant,
failure
to
keep
proper books or accounts;
9.
Influencing the action of any creditor, at
any
state
of
the
proceedings,
by
pecuniary consideration;
10.
Effecting any transfer, conveyance or
mortgage
in
contemplation
of
insolvency;
11.
Conviction of any misdemeanor under
the Insolvency Law:
12.
In case of voluntary insolvency, he has
received
the
benefit
of
insolvency
within
6
years
next
preceding
his
application for discharge; and
13.
If insolvency proceeding in which he
could have applied
are pending by or
against him in the RTC
of any other
province or city.
(Sec. 65)
Q: What are the effects of discharge?
A:
1.
It releases the debtor from all claims,
debts, liabilities and demand set forth in
the schedule or which were or might
have been proved against his estate in
insolvency.
(Sec.
69).
Hence,
non
provable
debts
are
not
affected
whether
or
not
they
were
properly
scheduled;
2.
It
operates
as
a
discharge
of
the
insolvent and future acquisitions, but
pemits
mortgagees
and
other
lien
creditors to have their satisfaction out
of the mortgage or subject of the lien;
3.
It is a special defense which may be
pledged and be a complete bar to all
suits brought on any such debts, claims,
liabilities or demands.
(Ibid.)
4.
It
does
not
operate
to
release
any
person liable for the same debt, for or
with the debtor, either as partner, joint
contractor,
indorser,
surety
or
otherwise;
(Sec. 68)
5.
The certificate of discharge is prima
facie evidence of the fact of release,
and the regularity of such discharge.
Note:
Where a debtor is judicially declared
insolvent,
the remedy of the
guarantor
or
surety would be to file a contingent claim in the
insolvency proceeding, if his rights as such
guarantor or sureties are not to be barred by
the
subsequent
discharge
of
the
insolvent
debtor from all his liabilities.
Q:
What
are the debts and obligations not
affected by discharge of insolvent?
A:
1.
Taxes
or
assessments
due
the
Government, whether national or local;
2.
Any
debt
created
by
the
fraud
or
embezzlement of the debtor;
3.
Any debt created by the defalcation of
the debtor as a public officer or while
acting in a fiduciary capacity;
4.
Debt of any person liable for the same
debt, for or with the insolvent debtor,
either
as
partner,
joint
contractor,
inorser, surety or otherwise;
(Sec. 68)
5.
Debts of a corporation
(Sec. 52);
6.
Claim for support;
7.
Discharged
