I am in Bankruptcy Court every week and I have the opportunity to observe a lot of other cases and talk to the Bankruptcy Trustees on a regular basis. I have noticed over time, that there are some common reasons why other people seem to have trouble with their cases filings.
The following list of observations are by no means complete; however, the list of consistent problems with other people attempting to file a bankruptcy on their own or with an inexperienced bankruptcy lawyer. Don’t let these problems happen to you. Consult with an experienced bankruptcy attorney and find out your options before you make a decision on how to proceed.
Having your bankruptcy filing rejected can cause a lot of stress, especially if you are having wages garnished or you are about to lose your home or have utilities shut off.
Now is the time to hire the best experienced bankruptcy attorney you can find to help you. Don’t make a bad situation worse by trying to figure it out on your own and “find your way” through the Bankruptcy Court system.
The most common reasons that your filing will be rejected is missing or incorrect information on your Petition, Schedules and Statement of Financial Affairs. The pleadings can be lengthy and complex, since it includes everything about every aspect of your finances, all your assets, and everything you owe money for and to whom it’s owed.
But aside from the odd mistake, there are four common reasons bankruptcy filers are likely to have their filing rejected—and they are all very preventable.
- You fail the Means Test. The means test determines how much disposable income you have and also measures your income against your state’s median income. If you have an above-average income and plenty left over after expenses, you won’t be allowed to claim you don’t have the means to pay back your debt. You can avoid this mistake by using an online means test calculator to get a rough estimate of what you need to qualify, or consulting with an attorney in the state you plan to file.
- Omitting tax information. You will have to request documents from the IRS showing your tax returns for a certain number of years preceding your bankruptcy. If you didn’t file taxes, this becomes problematic. Tax returns are required for both Chapter 7 and Chapter 13 bankruptcies. This needs to happen by the time your meeting of the creditors happens, or about a month after you file for bankruptcy.
- Failing to show up at the meeting of the creditors. The meeting of the creditors is when you meet with the attorneys and your bankruptcy trustee and swear under oath that all the information you have supplied is true and accurate. It’s a short meeting, usually 5 to 10 minutes, and usually doesn’t take place in court. It’s an essential part of the process, so you need to be there and have all your documentation in order, or you risk rejection of your case.
- You propose an unrealistic payment plan. Under Chapter 13 bankruptcy, you get to put together a three- to five-year plan of how you intend to pay back your creditors. This plan needs to be realistic because if you miss a payment, your case could get converted to Chapter 7 bankruptcy and you lose the opportunity to keep many of your assets.
- A creditor challenges your request for discharge. In Chapter 7, and some Chapter 13 cases, your debt may be discharged if the creditor agrees you do not have the means to pay it back. But if someone in your case, usually a creditor or the bankruptcy trustee, thinks you are being dishonest, hiding assets, or did not complete all the requirements for discharge, such as taking a credit counseling course, they can challenge your case and have your discharge revoked.
Over the past 31 years, the Law Offices of Christopher A. Benson has helped over 2,300 of Washington clients take control of their financial situation. We can stop your garnishment and change your monthly payments for all your combined unsecured debt, and if you have had more than $600 garnished within the last 90 days, we can get all of the money back in most cases. But you have to act quickly–call (253) 815-6940 for your free consultation, or email us today. Evening and weekend appointments available.