What are the Most Common Reasons for a Bankruptcy Denial?

Filing for Chapter 7 bankruptcy can be a great way to make a fresh start with your finances. And for many people, the experience is relatively stress-free. Once they work up the nerve to file they realize it wasn’t as bad as many believe, and within a matter of weeks they are working their way toward financial freedom. Even if you file for Chapter 13 bankruptcy and commit to a payment plan long-term, there is a renewed sense of confidence and control over your finances.

Unfortunately, there are instances in which bankruptcy does not go as planned. The court has the authority to deny a bankruptcy request and for many people, what seemed like the best way to get a handle on their situation turns into an even bigger nightmare.

The good news is that by working with a bankruptcy expert who understands the process and the court system, you can avoid many of the most common problems that cause a bankruptcy to be denied.

What are some of the reasons a Chapter 7 bankruptcy might be denied?

Fraud

Bankruptcy fraud will not only get your case denied, it can get you into a great deal of legal trouble. Bankruptcy fraud is illegal.

Keep in mind that even if you did not intend to commit fraud, you can still be found guilty of it. The court considers it fraud when you transfer, destroy, remove, or conceal property within a year of filing for bankruptcy or any time after you file. Debtors are not allowed to transfer titles of property to anyone prior to bankruptcy.

If the court suspects you tried to protect an asset by putting it in someone else’s name, even if you didn’t realize your actions were illegal, your bankruptcy request will be denied.

You can also be found guilty of fraud if you try to hide information from the bankruptcy court. You are not allowed to destroy documents, hide property, withhold earnings and tax information, or make false statements about your assets, your debts, or your earnings.

You and your bankruptcy attorney will review your situation in detail and he or she can help you provide complete and accurate information to the bankruptcy court. Just make sure you are open and honest with your attorney, so he or she is able to offer all of the legal protection available to you under bankruptcy laws.

Not Upholding Your Credit and Financial Counseling Obligations

As someone filing for bankruptcy, you are required to attend credit counseling courses within a certain period of time of filing. You must also complete debtor education and submit your certificate of completion to the court. If you fail to complete either of these obligations your bankruptcy can be denied.

For more information about your education obligations in bankruptcy, check out this information from the US Courts bankruptcy website.

Failing to Pay Court Fees or Submit Information to the Court

Bankruptcy is a legal process, which means there is plenty of paperwork involved. There is also a cost to file. If you do not handle the administrative aspects of your bankruptcy correctly your case could be denied. Your attorney will be a valuable resource when it comes to filing and making sure all of the “I’s are dotted and T’s are crossed.”

In general, as long as you are honest and forthcoming with the bankruptcy court, your case will not be denied. However, mistakes happen and the last thing you want is for an honest mistake to cause your bankruptcy case to be dismissed.

If you need assistance filing for bankruptcy, contact R. Flay Cabiness, II, P.C. at (912) 554-3774 (Brunswick, GA); (912) 375-5620 (Hazlehurst, GA) or; (912)-554-3756 (Jesup, GA).