Bankruptcy laws vary from state to state so always do your due diligence and find out what the bankruptcy laws in your own state are, and how they apply to you as a resident of that state. You\’d be amazed at just how often certain assumptions about bankruptcy can bring a filing to a screeching halt, resulting in the person filing for Chapter 7 or 13 having to start all over again.
One of the key things you need to understand about filing for bankruptcy is that it needs to be granted by a court – you\’re not automatically entitled to it because you\’ve gotten yourself into a financial quagmire. In fact there are a lot of reasons why you might not be eligible to obtain a discharge of your debts in the first place – including incorrect paperwork, filing as an individual instead of as a business, etc.
Of the many reasons why you might not be permitted to file for bankruptcy one of the primary ones is that you\’ve become something of a \”frequent flyer\” when it comes to trying to discharge personal or business debt. The reality is that most of the United States will only allow you to file for Chapter 7 bankruptcy once every 8 years or so. If you attempt to declare yourself bankrupt under Chapter 7 protection twice within a single 8-year period you can be almost certain your application for a discharge of your debts will be denied.
Incomplete Paperwork
If you\’re looking for the quickest way for your bankruptcy filing to be denied it is to present the courts with the wrong paperwork, or incorrectly completed paperwork instead. This is also an excellent reason for hiring a fully-qualified bankruptcy attorney to help you file when the time comes – it can save you a lot of time and a lot of money.
Abusive Filings
Most judges will obviously deny a bankruptcy filing if there\’s evidence to prove that you are financially capable of repaying the debt you owe based on your income and overall assets. That, however, doesn\’t stop large numbers of financially solvent people from attempting to discharge \”inconvenience\” debts each year. Basically if you can afford to repay your own debts then you should do so and not expect the court to make them disappear for you instead.
A quick list of the main reasons your bankruptcy filing might be denied:
1. Destruction of financial documents in relation to your filing
2. Concealment of property or assets with the intention to defraud a creditor
3. Presenting a false record of your financial accounts
4. Filing for a Chapter 7 or 11 discharge twice within the last 8 years
5. Filing for a Chapter 13 discharge twice within the last 6 years
5. Failing to explain the loss of a specific asset
6. Refusing to obey an order of the court
7. Failing to complete remedial financial training as part of your petition for discharge
If you want a full and complete list of all the reasons why your bankruptcy filing might be denied you can find them here: 11 USC Section 727.
Basically doing anything dishonest will have your claim denied, as will attempting to file bankruptcy repeatedly within very short timeframes.