Is it possible for a bankruptcy petition to be rejected, and if so, what are the potential reasons for denial? Our bankruptcy attorneys get this question a lot. We’ll help you better understand the factors the courts may consider.
Chapter 7 discharges may face denial based on various grounds specified in section 727(a) of the Bankruptcy Code. These include instances such as failure to furnish requested tax documents, neglecting to complete a mandatory personal financial management course, attempting to conceal or transfer assets with the intent to hinder, delay, or defraud creditors, destruction or concealment of financial records, perjury, and other fraudulent activities. Additionally, violations of court orders or a previous discharge within specified time frames before filing the current petition can also lead to denial.
In essence, if an individual fails to provide necessary documentation, tries to hide assets, engages in fraudulent activities, or does not fulfill the required financial management course, their bankruptcy discharge may be refused by the courts.
Denials typically occur for one of two primary reasons: either due to insufficient documentation and information or suspicion of fraud or illicit behavior. For instance, someone with a track record of accumulating debts, evading creditors, and repeatedly filing for bankruptcy might face a denial as the court may perceive a pattern of irresponsibility.
To mitigate the risk of denial related to improper paperwork or filing procedures, seeking the assistance of a bankruptcy lawyer is advised. A legal professional like our attorneys at Castle Law can manage the entire process on behalf of the individual, ensuring that all deadlines are met, necessary documents are gathered, and the case is well-prepared for court.
In certain cases, if it is later discovered that the debtor obtained bankruptcy through fraudulent means, the court may revoke the discharge. While discharge revocations are rare, they can occur under specific circumstances. Engaging the services of a bankruptcy lawyer can provide assurance and guidance throughout the process, minimizing concerns about the approval and finalization of the bankruptcy discharge.