Bankruptcy can be a welcome relief when you are struggling with debt. When you are caught in a debt that cannot be forgiven or written off, then you may consider filing for personal bankruptcy.
However, it is not uncommon for the court to deny a bankruptcy petition. If this happens, you might want to understand what went wrong so you can figure out your next course of action. Here are three instances when your petition for personal bankruptcy may be denied:
If you do not qualify
Bankruptcy laws have very strict eligibility requirements that you must meet to file successfully. For instance, if you are going for Chapter 7, you have to pass the income and means test. If you do not, your petition will likely be denied. And if you are going for Chapter 13, you must show that you have sufficient income to come up with a payment plan.
Lying about your assets
Some people attempt to cheat the system by lying about their assets. If a court discovers this and considers it fraud, you could face criminal charges as well as a denial of your bankruptcy application.
Failing to get the paperwork right
While filing for bankruptcy, you will be required to provide several financial documents like your tax records, income sources, monthly living expenses, loan documents as well as car titles and other assets in your name. Your bankruptcy petition could be denied if you do not provide the right paperwork.
Let’s face it, the process of filing for bankruptcy can be intimidating, especially when creditors are in hot pursuit. Understanding how bankruptcy laws work can help make the process simpler and ensure that you avoid pitfalls that can jeopardize your petition.
