Why Your Chapter 7 Bankruptcy Petition Might Be Denied
Chapter 7 bankruptcy can allow you to discharge all of your debt and receive a fresh start. However, there is no guarantee that you will automatically qualify for Chapter 7 bankruptcy. Therefore, it's important to meet with a bankruptcy attorney so you can determine what your best options are.
Not Following Your Judges Orders
When filing for bankruptcy, the judge might issue orders that you will be required to comply with. If you do not follow these orders, you might face consequences and you might also have your Chapter 7 bankruptcy case thrown out.
Failing to Participate in Credit Counseling
You are required to participate in credit counseling courses when filing for bankruptcy. Credit counseling courses are very easy to complete and can be completed online or over the phone. Failure to do so can be enough to have your bankruptcy petition denied.
Not Passing the Means Test
To qualify for Chapter 7 bankruptcy, you must have an income that is too low to afford Chapter 7. If you are able to make regular payments, you may instead be required to file for Chapter 13 bankruptcy. To determine which type of bankruptcy you qualify for, you must pass a means test. Being below the median income for your state is enough to pass. However, if there are upcoming changes, such as if you are expected to lose your job soon, you may still pass the means test. Also, if your disposable income is lower, you might pass the means test.
Because the means test can be complicated, it's important to not assume that you won't qualify for Chapter 7. Even if you are not able to qualify for Chapter 7, your bankruptcy petition might simply be converted into a Chapter 13 and you will still receive some debt relief. After making payments for five years, the debts that remain will be discharged.
Chapter 13 allows you to hold certain debts such as mortgages so you can continue to remain in your home. You will also not have to liquidate your assets. This allows you to keep your assets and will also provide you with a greater level of privacy.
You Can File For Chapter 7 Again
If you decide that you still want to file for Chapter 7, speak with a bankruptcy attorney firm such as McManus & Associates about how you can avoid having your petition denied a second time. You will be allowed to file for bankruptcy again after enough time has passed.