God requires us to confess our sins
1 John 1:9 New International Version (NIV)
9 If we confess our sins, he is faithful and just and will forgive us our sins and purify us from all unrighteousness.
But are we required to still confess our sins if we are saved? The answer is yes.
Just because one is saved does not mean they will never sin. We should strive to never sin, but things happen and God understands this. It does not mean He can be in the presence of sin though. It just means that we have to recognize that we sinned and then confess them to God.
But why if God already knows everything? It is because He does know. It is us who may be ignorant that we even committed a sin or it could be because we are being disobedient. Either way, it is a requirement that God has set forth for us to be forgiven.
What will happen if I refuse to confess my sins? Then you really have to ask yourself if you have received salvation. If you have been saved, then you will want to do whatever you can to please the Lord and you will try to be more like Christ.
So if you are having problems confessing your sins, I urge you to not only pray, but sit down and spend time with the Lord. Then I urge you to put away your pride and get down on your hands and knees and confess your sins and at the same time ask God to show you where you have sinned so you can confess those as well.