When people decide to file for bankruptcy, it’s usually because they have run out of alternative options and are desperate for a permanent solution to their financial troubles. While effectively completing any bankruptcy option can be a challenging process, the overall long-term rewards far outweigh the immediate hardships.
For many people, bankruptcy represents a second chance at a financially stable future. Chapter 7 is the most popular bankruptcy option because it liquidates a debtor’s property and assets to absolve their debts within a relatively short period of time. However, you have to complete each step of the process to reap the benefits. For Chapter 7 to be successful, debtors must follow specific legal guidelines and commit to absolute financial transparency. If debtors aren’t careful, they may suffer the consequences of having their case dismissed.
To benefit our clients, we’ve compiled a list of the most common mistakes debtors make that often lead to Chapter 7 bankruptcy dismissals.
Reason #1: Failing the Chapter 7 Bankruptcy Means Test
This is the most common reason that debtors have their cases dismissed. All debtors must pass a means test to quality for Chapter 7 bankruptcy. If this test isn’t passed, their case may be dismissed and they’ll have to file for Chapter 13 instead.
Reason #2: Not Following the Guidelines
There are specific forms and petitions you must submit to initiate and complete the bankruptcy process. If you fail to file any of these forms or refuse to pay the necessary legal fees, you may have your case dismissed.
Remember, by filing for bankruptcy, you aren’t just asking the court to absolve your debts, but to also teach you how to avoid bankruptcy in the future. All debtors must complete an approved credit counseling course within 180 days of filing for Chapter 7. Also, before their debts can be discharged, debtors must complete a financial management course and file a Debtor’s Certification of Completion of Instructional Course Concerning Personal Financial Management with the court. Debtors who do not complete these courses can face a Chapter 7 bankruptcy dismissal.
Reason #3: The Court Determines You Committed Fraud
Committing or attempting to commit fraud is the fastest and most serious way to get your case dismissed. Fraud constitutes transferring, removing, destroying, or concealing any property that you don’t want included in your bankruptcy case. This includes transferring property to a friend or relative with the intention of reclaiming it once your case is discharged. You can also commit fraud by hiding financial information from your trustee or the court; information fraud includes: lying or hiding property and assets, destroying financial documentation, lying about your financial situation, or failing to reveal your tax history.
Filing for Bankruptcy? Hire an Experienced Attorney
The best way to avoid a bankruptcy case dismissal is to hire an attorney who is knowledgeable about the Chapter 7 process. At The Buchalter Law Group, we understand that filing for bankruptcy can be overwhelming and intimidating for the uninitiated. Without legal guidance, it’s easy to miss a form or forget an important step. If you’re interested in filing for Chapter 7, schedule a consultation with our Brevard County bankruptcy attorneys. Our firm takes pride in successfully guiding our clients through every step of this complicated process.
Call The Buchalter Law Group at (321) 320-6088 to schedule your free consultation.