Embarking on the journey of Chapter 7 bankruptcy can be a daunting but necessary step towards financial recovery. However, the road to a "fresh start" isn't always smooth, and the possibility of denial looms. At The Law Offices of Nicholas J. Del Pizzo, a bankruptcy lawyer in Baltimore, MD, we understand the intricacies of Chapter 7 and are here to guide you through the process. In this article, we'll delve into the question: Can Chapter 7 bankruptcy be denied?
Am I Eligible to File for Chapter 7 Bankruptcy?
The promise of a "fresh start" under Chapter 7 bankruptcy isn't guaranteed for everyone. Despite a 99% success rate for cases that reach the debt discharge phase, many stumble in the initial stages. Missed deadlines or overlooked requirements can lead to dismissals, emphasizing the importance of meticulous paperwork and legal expertise.
Why Can Chapter 7 Bankruptcy Be Denied?
Bankruptcy is a complex process, and denials often stem from inadvertent mistakes, intentional fraud, or insufficient information. The decision to discharge debt lies with the bankruptcy court, making it crucial for filers to provide accurate and complete information. Common reasons for denial include improper filing, filing too soon, failing the Chapter 7 means test, non-payment of court fees, dishonesty, and failure to attend credit counseling.
- Improper Filing: Mistakes or omissions in filing documents, filing for ineligible entities, or filing within 180 days of a previous dismissal are common reasons for denial.
- Filing for Bankruptcy Too Soon: Federal law mandates waiting periods after previous bankruptcies, and filing too soon can result in denial.
- Failing the Chapter 7 Means Test: Passing this test is crucial, proving an inability to pay debts based on income, expenses, and assets.
- Not Paying Court Fees or Making Payments: Non-payment of filing fees or associated costs can lead to dismissal unless alternative arrangements are made.
- Dishonesty and Fraud: The court scrutinizes honesty in financial disclosures, and any attempts to manipulate information can result in case dismissal.
- Failure to Attend Credit Counseling: Mandatory credit counseling within 180 days before filing must be completed, and failure to do so may lead to denial.
What Percentage of Chapter 7 Bankruptcies are Denied?
Approximately 99% of Chapter 7 bankruptcy cases culminate in debt discharge. However, a significant number falter in the early stages due to various reasons such as eligibility issues, incomplete filings, course non-completion, fee non-payment, or lack of honesty in the application. Unfortunately, the U.S. Bankruptcy Court doesn't track statistics on how many cases fail to progress to the discharge phase.
Need Help Navigating Your Bankruptcy Options?
If you're facing the complexities of Chapter 7 bankruptcy, The Law Offices of Nicholas J. Del Pizzo, III P.A. in Baltimore, Maryland, is here to assist. Our experienced attorney, Nick Del Pizzo, provides personalized attention, ensuring your case receives the care it deserves. We understand legal needs extend beyond regular business hours, and we make ourselves available seven days a week to seek the best resolution for your case. Consult with us for dedicated support in foreclosure, bankruptcy, personal injury, or medical malpractice cases. Your legal need becomes our cause.