Bankruptcy is usually known as something which is a choice of an individual. Many would be surprised to note that there are two types of bankruptcy one is voluntary and the other is forced. Voluntary is the process where the borrower himself or herself files for bankruptcy with the bankruptcy court. The other form is forced or involuntary bankruptcy wherein the lenders file on behalf of the borrower to recover their debt or access lien on some of the secured assets. Know more about bankruptcy proceedings at https://www.recoverylawgroup.com/bankruptcy/.
Can a voluntary bankruptcy be rejected?
The basic crux of bankruptcy is the financial inability to repay debts. If you can satisfy the bankruptcy court about your dire financial situation and inability to repay debts, the bankruptcy court will value the request and discharge most of your outstanding debt in exchange for your assets, especially with Chapter 7. Under Chapter 13, the bankruptcy court will prioritize the secured debts and determine a feasible repayment plan over 3-5 years based on the disposable income. It is important to provide accurate and honest information in all the forms, and statements, in the bankruptcy procedure to ensure the bankruptcy claim is not dismissed.
If the bankruptcy court deems the claims are not true and the documentation is insufficient or incomplete, the bankruptcy claim can be rejected. The involuntary bankruptcy claim might also be rejected on the same grounds and a suit might be recommended by the court against the borrower. If the forced bankruptcy is rejected by the bankruptcy court, the lenders can sue the borrower for availing of their money.
Weighing the discharge
The possibility of availing of discharge is highest in chapter 7. However, there can be scenarios wherein there is absolutely no discharge. This can happen in chapter 13 bankruptcy or in case you are filing bankruptcy before the seasoning or cool off period. Chapter 13 bankruptcy aims at settling the maximum credit possible in the next 3-5 years with a pre-determined payment plan based on disposable income. Under normal circumstances, there will be some discharge whether in chapter 7 or chapter 13. To ensure bankruptcy is the right move for you, do not forget to dial 888-297-6203 and access some quality suggestions and advice from world-class attorneys based out of Los Angeles & Dallas, TX.