The decision to declare bankruptcy is one that you should never take lightly. If you get it right, bankruptcy can provide relief from certain kinds of debts or allow you to restructure a payment plan that suits your current financial situation.
However, it is not unusual for a bankruptcy claim to end in denial. And as you can imagine, learning that your bankruptcy petition has been denied can be devastating, to say the least. But why you the court deny your bankruptcy claim in the first place?
Here are two common reasons why this might happen.
Bankruptcy is a big deal. When declaring bankruptcy, you will be required to be as forthright as possible. Any attempt to defraud, delay or hinder your creditor by removing, transferring or concealing property can land you in serious trouble with the court. Besides the possible denial of your claim, you might be charged with bankruptcy fraud.
As a rule, do not give away assets on the eve of bankruptcy. In other words, make full disclosure when completing the paperwork. Any sign of dishonesty will most likely ruin your claim.
Failing to complete the mandatory instructional courses
Before approving your bankruptcy petition, you will be required to sign up with and complete personal financial management courses under the U.S. Bankruptcy Code. Firstly, you must complete a credit counseling course before getting started with your bankruptcy case. Secondly, you must complete a financial management course before your bankruptcy can be discharged. Failing to complete these two mandatory courses can lead to your claim’s denial.
When you file for bankruptcy, you hope to get relief from creditors’ phone calls. Most importantly, you want a fresh start – financially speaking. Find out how you can avoid costly mistakes that can derail your bankruptcy petition.