For most people, filing for bankruptcy is not an easy decision, but once they’ve made up their mind to move forward, the idea of a fresh start becomes very appealing. Unfortunately, the process is not as easy as simply filling out some paperwork. There are strict eligibility rules for a Chapter 7 bankruptcy filing, and if you don’t qualify you are likely to be shuffled into a different category of bankruptcy, Chapter 13. Though both can eliminate the harassing phone calls and collection notices that often drive people to file in the first place, the two are very different. Under Chapter 7 you are able to discharge almost all of your debts, where under Chapter 13 your debts will be reorganized and you’ll be given a more forgiving payment plan that keeps you on the hook for what you owe but gives you more time or better terms.

So what would lead to your Chapter 7 bankruptcy filing be denied? First, the majority of Chapter 7 filings that are denied have been filed directly by the debtor rather than by an experienced bankruptcy attorney. Working with a lawyer who knows what they are doing significantly improves the chances that your petition meets all of the eligibility requirements and is filed correctly.

In order to ensure that you qualify, your attorney will ask you a long series of questions, as well as for specific information about all of your assets and their value. This is essential information, as in order to qualify for a Chapter 7 bankruptcy, your income needs to be lower than can reasonably support your necessary and reasonable monthly expenses as well as paying off your debts. The information is also important because any assets of value that you have may need to be sold in order to pay off part or all of your debts.

Generally speaking, there are five reasons why a bankruptcy claim could be denied. These are:

• Failure to attend the credit counseling that is mandated by the bankruptcy laws
• Ineligibility due to income, thus shifting the claim to a Chapter 13 bankruptcy filing
• Fraud on the part of the debtor against either the court or creditors
• Too little time passed since previous Chapter 7 bankruptcy (8 years)
• Too little time passed since previous Chapter 13 bankruptcy (6 years)

Though you can always reapply for a Chapter 7 bankruptcy if you are denied, you can avoid the situation by making sure that your filing is done correctly in the first place by using an experienced bankruptcy attorney. For information on how we can help, call today to set up a time to chat.