The main goal of filing for bankruptcy is to receive a discharge of your debt. You’ll receive immediate protection when you file for bankruptcy under automatic stay. Bankruptcy represents relief for many individuals that are facing overwhelming debt but it is still possible to have a bankruptcy case dismissed or discharged depending on your financial situation. If you are considering filing for bankruptcy and you worry about the bankruptcy potentially being denied, it is important to educate yourself on some of the main reasons this may happen.
Here Are Some Of The Main Reasons Why Bankruptcy Can Be Denied:
Fraud
In any case of bankruptcy, you need to be completely honest about your financial situation. Failure to tell the complete truth to a bankruptcy trustee or your attorney could quickly have your bankruptcy denied. Bankruptcy fraud is even considered a white-collar crime and you could face penalties as a result of filing for bankruptcy under fraudulent conditions.
Bankruptcy fraud typically takes on the form of concealing assets, intentionally filing incomplete or false forms, filing multiple times using false or real information in several jurisdictions or bribing court-appointed trustees for your bankruptcy process.
Bankruptcy fraud can also be followed up by a series of other crimes in the bankruptcy including mortgage fraud, money laundering, corruption, and identity theft. Making a false statement is illegal and lying is just as dangerous in a bankruptcy case. When you present false information or forget to include various assets you could be jeopardizing your bankruptcy case.
If you are found guilty of bankruptcy fraud you could face a series of fines or potentially incarceration if you took on a number of fraudulent activities while filing for bankruptcy.
The Bankruptcy Means Test
Another reason why your claim could be denied comes as a result of failing the financial means test. The ID of the financial means test is to make sure that bankruptcy does not become a burden on the courts and that people who are capable of paying back their debts can do so without filing for bankruptcy.
The financial means test works by deducting a series of monthly payments from your current monthly income and determining your disposable income. If your disposable income isn’t low enough for you to pass the means test, your claim will likely be denied. If you feel the means test for Chapter 7 bankruptcy you may be able to seek a chapter 13 bankruptcy repayment plan as an alternative for discharging some or all of your debt.
Failure To Complete Education Classes
Under US bankruptcy law you will need to complete two educational courses to receive a debt discharge. If you file for Chapter 7 bankruptcy, it’s likely you will have to agree to credit counseling courses before starting your bankruptcy case. The goal of these classes is to educate debtors for their future financial situation. These courses include information about the repayment of debt and budgeting. You’ll also need to complete a debtor education course before you receive the discharge on your debts.
The two classes cannot be completed at the same time and you need to make sure that the classes you attend are approved by the US trustee program so that you can receive credit. You’ll receive a certificate at the end of these classes to signify your completion. A failure to submit these certifications in a timely manner will result in your bankruptcy being denied.
Making Sure Your Bankruptcy Case Is Not Denied
If you’re facing the decision to file for Chapter 13 bankruptcy or Chapter 7 bankruptcy and you want to make sure that you can present a clear financial situation, working with a professional bankruptcy attorney can make sure you can have everything in place for the courts.
The decision to file for bankruptcy can be a difficult one and it may feel like you’re the only option once you become involved in the process. Working with the right representation can prepare you for your bankruptcy case and he can make sure that your bankers have a far greater chance of being approved.
Even though a denial of bankruptcy is possible, it is usually quite rare and often occurs when a person takes fraudulent action to hide their assets or attempts to take advantage of the bankruptcy system.
When filing for eight at the bankruptcy case is important, to be honest, and transparent with your attorney and with the courts. Contact us today and remember that bankruptcy fraud is a crime punishable by fines and incarceration. Present your case with full transparency and we can work with you to determine the best path for you to qualify for debt relief through bankruptcy.
If you are interested in undergoing bankruptcy proceedings, contact us today for a free consultation.