The goal of filing bankruptcy is to receive a discharge of debt, whereby you will receive protection under the automatic stay. However, while uncommon, it is possible to have your bankruptcy case dismissed and your discharge denied by the courts. Below, we’ll outline a few of the most common causes for having your bankruptcy denied.
1. Bankruptcy Fraud
Honesty is always the best policy. Failure to tell the complete truth to your attorney or your bankruptcy trustee is the easiest way to have your bankruptcy denied. If you make false statements, lie by omission, or fail to accurately disclose all information related to your assets, income, or property, you are likely to have your debt discharge challenged. Not only could you jeopardize your bankruptcy case, but you also face fines and possibly incarceration on the grounds of bankruptcy fraud.
2. Failing the Means Test
The bankruptcy means test is used by courts to ensure that the burden of debt repayment is substantial when compared to your income concerning your monthly expenses. It works by deducting specific monthly payments from your current monthly income to determine your monthly disposable income. If your disposable income isn’t low enough for you to pass this test, your bankruptcy case can be denied.
3. Failure to Complete Mandatory Education Courses
U.S. bankruptcy law requires the completion of two educational courses to receive debt discharge. Firstly, you must complete a credit counseling course before beginning your bankruptcy case. Then you must complete a debtor education course before receiving a discharge. These classes cannot be completed at the same time, and you must make sure that your classes are approved by the U.S. Trustee Program to receive credit for them. These classes give certificates of completion, but failure to submit these certificates in a timely manner to the courts can result in being denied bankruptcy.
Making Sure Your Bankruptcy is Not Denied
Facing the decision to file bankruptcy is already a difficult one—you don’t want to make it more difficult by having your bankruptcy denied by the courts. The right counsel and representation will work with you to ensure it that doesn’t happen. At Parker & DuFresne, we represent clients in Jacksonville, FL, and we can help safely guide you through the bankruptcy process. Contact our offices for a free consultation today.