Can Bankruptcy be Denied?
Simply put, yes, your application for bankruptcy can be denied. Though the typical individual applying for bankruptcy should generally not have much trouble, there are circumstances that may prevent you from having your debts discharged through bankruptcy.
Means Test
The most common reason for a bankruptcy filing being denied is that an individual simply does not meet the criteria for applying for certain types of bankruptcy. For example, to be approved for a Chapter 7 bankruptcy, you must pass a “Means Test.” This test simply acknowledges that your income in low enough to qualify to file through Chapter 7. Read more information on the criteria to apply for a Chapter 7 bankruptcy.
Fraud
Committing bankruptcy fraud is one surefire way to be denied bankruptcy. Hiding assets, concealing or destroying information, or lying to the bankruptcy court or trustee are all acts of fraudulent behavior that, if found to be done intentionally, will result in a bankruptcy denial. Additionally, being denied bankruptcy due to fraud allows the bankruptcy court to still seize certain assets, without discharging debts.
Though fraudulent behavior is typically done with malicious intent, those attempting to file bankruptcy honestly may also be denied, or at least heavily delayed, due to accidentally breaking the above guidelines. Take a look at our “Bankruptcy Do’s and Don’ts” blog for additionally insight on how to move through your bankruptcy case as smoothly as possible.
Mandatory Education Courses
Federal bankruptcy law requires those seeking bankruptcy to complete two informational courses prior to having their debts discharged. A certificate of completion is required by the courts and without it being properly filed, your bankruptcy will likely be denied.
Bankruptcy Procedure
It’s important to enlist the guidance of an experienced bankruptcy law attorney to ensure you’re well informed of what is required of you, as well as to make sure all documentation and filings are done in accordance with the bankruptcy protocol. Missing mandatory meetings or hearings, or filing late, inaccurate, incomplete, or just plain missing documentation can all be grounds for a denied or cancelled bankruptcy case.
Whether your bankruptcy is denied or cancelled due to intentional or unintentional behavior, the consequences of a failed bankruptcy tend to linger longer than most might suspect. Despite what caused the bankruptcy to fall through, the filing is generally not removed from your credit. Your credit may continue to be impacted for up to 10 years regardless of whether debts were discharged or not.
If you are considering bankruptcy, be sure to contact an experienced bankruptcy attorney as early in the process as possible to ensure your bankruptcy is approved and moves as smoothly as possible. Contact our office to set up a consultation with our experienced bankruptcy attorneys to discuss your specific situation in detail. Our office can be reached at (702) 998-1188, info@ljlawlv.com, or by scheduling a consultation online.
For more information on bankruptcy and other related topics, check out our Bankruptcy Law blog and Bankruptcy Law TV playlist on Youtube.