Bankruptcy is designed to help people get financial relief from debts. Consumer bankruptcy results in a discharge wherein a federal court order eliminates debts and wipes the slate clean of the bankruptcy filer. Though used effectively by numerous people every year, Los Angeles based bankruptcy law firm https://bankruptcy.recoverylawgroup.com/, clarify that discharge can be denied to people if there has been any incidence of fraud or mismanagement of property. Any attempt to hide or transfer property to defraud your creditors is not looked upon kindly by the courts and your bankruptcy discharge can be denied on this basis.
What can cause your bankruptcy discharge to be denied?
While filing for bankruptcy, it is important that you hire a competent attorney. Though people can file without an attorney too (pro se) but there are a lot of procedures to be followed and paperwork to be handled and doing it all alone can often result in a mistake which might prove costly! There are a number of reasons why a bankruptcy case is dismissed and discharge denied.
Here’s what you should avoid during your bankruptcy filing:
- Hiding assets– Many people, in a bid to protect their assets, transfer the same to their family members or friends. Such a practice is considered dishonest by the court. In an instance, a couple transferred the title of their home 7 years prior to bankruptcy filing to avoid paying creditors of a debt from a personal injury lawsuit. Since they tried concealing assets in order to defraud creditors, the bankruptcy was dismissed.
- Doctoring financial records –Your financial records should be in order when you file for bankruptcy. Destroying or trying to hide financial records is not looked upon kindly by the court. Your debts and assets should be clearly available for the bankruptcy trustee to make an accurate judgment of your ability to clear your debts.
- Making false claims– Any misrepresenting of facts including making false claims during your bankruptcy case is the reason for discharge to be denied. Declaring your assets is important for clarity. In case you are unaware of some documents or are unclear about any misrepresentation, it is important that you discuss the issue with your attorney to avoid any problems later on during your bankruptcy case. Lying in paperwork can have ramifications so avoid making any mistakes.
- Failure to complete a mandatory financial management course–Financial management course is a mandatory requirement prior to a bankruptcy You need to enroll in the course and complete it. Failure to do so is a confirmed way to get your bankruptcy case dismissed.
- Not obeying court orders– Certain requirements are specified by the court which needs to be compiled by the bankruptcy filer. Failure to complying with court-mandated order (providing previous tax refunds) can result in your discharge to be denied.
- Filing for bankruptcy again before the specified time has passed – In case you have gone through bankruptcy previously, you have to wait before filing for another discharge. If you have received a Chapter 7 discharge previously (within past 8 years) or you received a Chapter 13 discharge (within past 6 years) then you cannot be allowed a discharge before 8 years or 6 years respectively have passed.
From the above factors, it is clear that you need to be completely honest while filing for bankruptcy papers and keep everything organized if you wish to get a discharge for your bankruptcy case. Following the court orders is extremely important. Since every bankruptcy is different it is important to consult a bankruptcy attorney for your case. You can seek to consult at 888-297-6203 regarding your financial situation and which bankruptcy would suit you.