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Most Common Reasons That a Chapter 7 Bankruptcy Case in New Jersey Could Be Denied

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The rejection or denial of a Chapter 7 bankruptcy case is very unusual even though there are reasons why a Chapter 7 case can be denied. Many denials are due to a lack of attention to detail on the part of the attorney, errors made on petitions or fraud itself. The attorney has to be knowledgeable about the law and understand what is required by the courts and local trustees. Furthermore, the attorney must be comprehensive with the bankruptcy petition information.

The debtor’s attorney needs to ask all relevant and necessary questions for the bankruptcy petition in the case.The petition needs to include all of the debtor’s assets and each asset’s value. In the event the value is substantial in comparison to the loan payoff, the trustee could be allowed to sell the asset. Any mistakes that are made in that process could lead to the petition being denied. The main criteria for a Chapter 7 discharge has to do with the debtor’s household income, which must be lower than the debtor’s necessary/reasonable household expenses paid on a monthly basis. It must be illustrated that the debtor cannot make monthly payments towards the debt.

Additionally, under Chapter 7 bankruptcy rules, a debtor may be considered ineligible under the following circumstances:

  • The debtor failed to attend credit counseling
  • Their income, expenses, and debt would allow for a Chapter 13 filing
  • The debtor attempted to defraud creditors or the bankruptcy court
  • A previous debt was discharged within the past eight years under Chapter 7
  • A previous debt was discharged within the past six years under Chapter 13

Your attorney must be prepared to ask you detailed questions about your assets, transactions, and finances in order to put together an appropriate bankruptcy petition. You need to provide accurate information to your attorney because these are the materials that will be listed on your bankruptcy petition and you could lose the ability to recover the benefits of bankruptcy if it is identified that you purposely hid information from anyone involved in the case. Consulting with an experienced bankruptcy attorney is a great way to evaluate your needs.

Do you want to know whether or not you’re eligible to file for bankruptcy in NJ? Contact the Law Office of Joel R. Spivack to discover more at 856-861-6203 today.

 

The articles on this blog are for informative purposes only and are no substitute for legal advice or an attorney/client relationship. If you are seeking legal advice, please contact our law firm directly.