3 Common Errors That Could Cause Your Chapter 7 Bankruptcy Application To Be Denied

Posted on: 16 August 2016

If you are sick of harassing phone calls and constant mailings from your creditors, bankruptcy may provide you with the fresh start that you need. Unfortunately, when money is tight and you learn that you can declare bankruptcy without an attorney, it may seem as if doing so is the best choice. However, since declaring bankruptcy can be both time-consuming and complicated, even a minor error can result in your application being dismissed. The following examples of common reasons for Chapter 7 bankruptcies to be denied will make it very clear why you need an experienced bankruptcy lawyer on your side.

#1-You Made Too Much For A Chapter 7 Bankruptcy

One common mistake that people make when declaring a Chapter 7 bankruptcy often relates to their annual income. Since a successful Chapter 7 bankruptcy will remove most or all of your debts, you will usually need to fall into a lower income bracket to qualify.

While it may seem as if determining whether or not you are above the maximum income level to be able to dissolve most or all of your debts through Chapter 7 bankruptcy, there are variables that could impact the means test. For instance, if you have had a baby or adopted a child this year, or she would not be reflected on the income tax forms, the court may ask you to provide for prior years. Therefore, you should speak with your bankruptcy attorney about providing the necessary documents to have the new child included when determining if your income will allow you to qualify for a Chapter 7 bankruptcy.

#2-You Claimed The Wrong Exemptions For Your State

One of the more confusing aspects of filing for Chapter 7 bankruptcy is frequently determining which exemptions you should claim. That is because each state has the right to determine the exemptions for their state, as does the federal government. Some states allow you to choose whether you will use the exemptions for your state or the federal exemptions. Since exemptions can be defined as the items you can protect from debtors during bankruptcy, it is crucial to be sure you have declared them appropriately.

However, since not all states allow you to adhere to the federal requirements, your bankruptcy application could be denied if you erred in not using the right one. In that instance, your application would probably be dismissed, and you would need to re-file.

#3- You Missed Meeting With The Creditors

It is important to note that if successful, your Chapter 7 bankruptcy will eliminate your debt. As a result, one of the events that you should plan to attend is the meeting of creditors, even though it is not common for any of your creditors to show up. Unless you have a particularly stubborn creditor who is willing to come to the facility and try to get money when you are clearly indicating that you have none to give them, this meeting is usually pretty quick.

You will be asked to give specific details to the court and you will be under oath at the time. Although it is usually a quick and easy appointment, skipping it can result in a denial of your application. Instead, it is a better choice to stay in touch with your lawyer and let them know if you cannot attend the meeting, as it may be possible to reschedule.

In conclusion, declaring bankruptcy can often help you get a fresh start after high credit card bills or overwhelming medical bills have impacted your life. However, a single error can when filing can result in your bankruptcy application being denied. As a result, you should work with an experienced bankruptcy attorney so that you will be more likely to avoid the above errors that are commonly related to filing for a Chapter 7 bankruptcy. 

For more information, visit http://shoedartlaw.com/ or a similar website.