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Can My Bankruptcy Be Rejected or Turn Down?

Indianapolis Bankruptcy Attorney Explains “Bankruptcy Rejection”

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Can My Bankruptcy Be Rejected or Turn Down? – Practicing Bankruptcy Law near Indianapolis, Indiana, we are many times asked whether a bankruptcy can be rejected or turned down. Can your case be rejected or turn down? The answer is “No.” If you follow the rules of Chapter 7, you generally cannot be “rejected” or “turned down” for bankruptcy relief. Therefore, the question becomes how do you not follow the rules of bankruptcy so that your Chapter 7 case could be rejected.

Rejection in Chapter 7 Due To Too Much Income

If your attorney’s interpretation of the Chapter 7 Means Test does not match up to the United States Trustee’s interpretation, you may have your case rejected in Chapter 7. Therefore, if you are “very close” or “right on the line” on whether you can file Chapter 7 bankruptcy, the United States Trustee may file a motion to dismiss the case or alternatively to convert to Chapter 13. You would be “forced out” of Chapter 7 into Chapter 13 or your case would be dismissed. Although this scenario is not very common, it can happen on very close cases.

Rejection Due To Not Following The Rules of the Trustee and Bankruptcy Court

If you ask for Chapter 7 relief, you have to follow the rules after you file your case. If the Trustee (the overseer of your case) holds that an asset or information needs to be turned over, then you must comply quickly. If you refuse to turn over an asset or spent up the asset and cannot repay it, the Trustee will eventually revoke your discharge and your original Chapter 7 case will be rejected.  Do not worry: if you follow the rules and request of the Bankruptcy Trustee, this should never happen.

Rejection For Fraud

The final cause for rejection of your Chapter 7 case is for fraud. Although findings of fraud are rare in Chapter 7 bankruptcy, your bankruptcy case can be rejected and your discharge can be revoked if you are caught lying to the court or trying to abuse the system. With fraud, you can also face criminal charges. Once again, this is very rare and you do not need to worry about this more than likely if you are a genuine, regular bankruptcy filer.

Just Follow the Rules and You Will Not Be Turned Down or Rejected for Bankruptcy

If you follow the rules, you have nothing to worry about with bankruptcy. You are entitled to the relief and it will not be held back from you. Do not be afraid of being rejected for Chapter 7 relief. Call our Indiana Bankruptcy office and get relief today.

– Indianapolis Bankruptcy Attorney John Bymaster

Rare Chapter 7 Bankruptcy Dismissals

Rare Reasons Why a Chapter 7 Bankruptcy Case Can Be Dismissed

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Rare Chapter 7 Bankruptcy Dismissals – When it comes to dismissals and bankruptcy, the general rule is that Chapter 7 cases are rarely dismissed but Chapter 13’s are very commonly dismissed. Bankruptcies can be dismissed for various reasons -some good and some bad. Let’s discuss the dismissal of Chapter 7 bankruptcies and what types of dismissals are encountered.

Chapter 7 Bankruptcy Dismissals By The Trustee

Chapter 7 cases are rarely dismissed in the bankruptcy system. The usual outcome of a Chapter 7 is the discharge order and closing of the bankruptcy case. This is the normal desirable outcome in which all of your debts are eliminated.

However, on rare occasions the dismissal of a Chapter 7 bankruptcy can be necessary. First, a case can be dismissed by the Chapter 7 Trustee or United States Trustee due to an ineligibility for Chapter 7 or some other bad faith circumstance. The Trustee and United States Trustee are responsible for maintaining the proper application of the bankruptcy code. In rare cases when the eligibility for Chapter 7 is questionable, a motion to dismiss can be filed.

The most common motion to dismiss in a Chapter 7 is due to an interpretation by the United States Trustees Office that the debtor is not eligible for Chapter 7 according to their means testing. To put it simply, the United States Trustee believes that the debtor is making too much money to be in Chapter 7. The debtor may have sufficient income to pay back some of their creditors in a Chapter 13 case. In such a situation, the debtor will be given the choice to either dismiss their Chapter 7 case or convert their current Chapter 7 case to Chapter 13.

Voluntary Motions to Dismiss Brought By The Debtor in Chapter 7 Bankruptcy

Sometimes there are good, acceptable reasons for a Chapter 7 debtor to dismiss their case. For instance, a Chapter 7 case can be voluntarily dismissed by the debtor in order to address new large unexpected debts such as medical bills from a heart attack or stroke. In such a situation, the new medical bill would have to have occurred almost immediately after the bankruptcy case was filed. The Bankruptcy Trustee would likely not have an objection to such a motion to dismiss as long as the debtor still turns over any non-exempt assets into the bankruptcy estate.

Keep in mind, however, that not all voluntary motions to dismiss in Chapter 7 will be granted. The Trustee has a duty to administer an estate with assets in order to protect the creditors. If a Chapter 7 debtor plans to file bankruptcy, he cannot rely 100% upon any ability to get out of the Chapter 7 process after it has started. The attitude of “let’s do this and see what happens” is not the proper attitude to have when you file for Chapter 7 Bankruptcy. Chapter 7 should be thought of more like a potentially irreversible process that can have consequence that include losing certain types of assets.

Conclusion: Chapter 7 Rarely Produces Dismissal of Your Case

Chapter 7’s are rarely denied and are very infrequently dismissed. If you need to get relief from your debts, Chapter 7 is a relatively simple process that can eliminate your debts in a short time. Although dismissals do occur in Chapter 7 bankruptcy, they are very rare and do not affect most cases.

– Indianapolis Chapter 7 Bankruptcy Attorney John Bymaster