Bankruptcy protection exists to assist individuals and businesses facing overwhelming debt. There are several different options available under the Bankruptcy Code, and almost anyone struggling to meet their financial obligations can find a path that helps them make a fresh start. However, not every filing is automatically approved. If you’re considering seeking debt relief through bankruptcy, it’s vital to understand if a condition exists that would cause you to be disqualified.
Some of the most common reasons why a bankruptcy filing may be rejected include the following:
- Chapter 7 means test — Given that Chapter 7 bankruptcy is such a powerful debt relief measure, it is limited to those who truly need it. If your household income exceeds the median income for a Georgia household of your size, a Chapter 7 filing might be denied, based on what is known as the “means test.” This analysis can be complicated, so you should speak with an experienced attorney about your particular situation. In the event you are not eligible due to the means test, you could request a Chapter 13 repayment plan.
- Time restrictions — Bankruptcy laws impose mandatory waiting periods that must be completed between filings. For example, if you received a Chapter 7 discharge, you must wait eight years before initiating another Chapter 7 proceeding, and four years before filing for bankruptcy under Chapter 13.
- Abuse of process — Indications that someone might be trying game the system, such as large purchases shortly before filing, can lead to the denial of bankruptcy relief.
- Lack of documentation — Information on assets, debts, income and expenses must be fully documented when you petition for bankruptcy. Working with a knowledgeable attorney can ensure that forms are completed correctly so that your filing does not raise any red flags.
- Failure to complete required courses — Before filing for bankruptcy, individuals must complete a credit counseling course approved by the U.S. Trustee Program. Additionally, a debtor education course is required before debts can be discharged. Failure to complete these courses can result in dismissal.
Making the decision to seek bankruptcy protection is a critical step toward relieving your financial burden, but before getting started it’s important to speak with a seasoned attorney regarding the qualification criteria.
At Jeff Field & Associates, we advise Georgia residents on all types of bankruptcy matters. For a consultation, please call 404-381-1278 or contact us online. Our offices are in Douglasville, Gainesville, Bogart, Lawrenceville, Marietta and Scottdale.