Filing for bankruptcy will result in a discharge of your debts. You’ll also be protected under the automatic stay. Although it’s rare, you can have your bankruptcy case dismissed or your discharge denied by the courts. The answer is yes.
We’ll discuss some of the most common reasons why your bankruptcy case may be denied.
Bankruptcy Fraud
Honesty is the best policy. It is possible to get your bankruptcy petition denied by telling the truth to your attorney and your bankruptcy trustee.
According to experts, bankruptcy fraud is a white-collar crime that can take four forms.
- To avoid losing assets, a debtor hides assets.
- Intentionally filing false or incomplete forms. False information in a bankruptcy application could also be considered perjury.
- A person can file multiple times with false or true information from different jurisdictions.
- A person bribes a court-appointed administrator.
The criminal may combine one of these types of fraud with another, such as identity theft, mortgage fraud, money laundering, or public corruption.
Failure to File for Bankruptcy
Courts use the bankruptcy means test to determine if your monthly income is sufficient to cover the debt repayment. To calculate your monthly disposable income, you subtract specific monthly payments from the current month’s income. If your disposable income is not sufficient to pass this test, bankruptcy can be denied.
Failure to Complete Mandatory Education Courses
To be eligible for debt discharge under U.S. bankruptcy law, you must complete two courses.
Before you can file for bankruptcy, you need to complete a credit counseling class. This course is designed to help debtors learn about budgeting and how to repay debt. Before you can receive a discharge, you will need to complete a debtor education class.
These classes can not be taken simultaneously. You must ensure that all classes are approved by the U.S. To receive credit for these classes, you must use the Trustee Program. Certificates of completion are issued by the classes. You could lose your bankruptcy petition if you fail to send these certificates to the courts in a timely fashion.
This post was written by Trey Wright, the best Jacksonville bankruptcy lawyer! Trey is one of the founding partners of Bruner Wright, P.A. Attorneys at Law, specializing in bankruptcy law, estate planning, and business litigation.
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