Chapter 7, 11, and 13 Bankruptcy
You Want To File Meticulously
The lawmakers were concerned with the sheer number of people taking help, or rather abusing the facility when they decided for filing for bankruptcy, or availing Chapter 7 bankruptcy and eventually abusing the system as well. People went under debt for no convincing reason, and then depended on Chapter 7 to give them a fresh start.
With the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, even though one does get to choose the preferred type of bankruptcy, the debtor will not always have the last say in it. Following are some reasons why a judge can deny the type of bankruptcy you opt for, and the application may also face the risk of getting dismissed.
• If one fails to meet the requirements of bankruptcy
There are limits to the amount of secured and unsecured debts that is fixed when filing chapter 13 bankruptcies or chapter 7 bankruptcies. If the debtor goes beyond the limits, he or she will not qualify for it.
• If the personal income is very high, and one still wishes to apply for Chapter 7, then there are full chances of not getting your choice of bankruptcy. The applicant should be earning less than the median salary, or can take the Means Test for another chance of keeping the bankruptcy option alive. In a Mean test, if after calculating the income and expenditure, there is at least $167 a month that one can spare towards repaying activity, the case gets dismissed. You can go ahead with Chapter 13 repayment plan.
• Filing Fraud in bankruptcy appeal
If the court concludes that a debtor is lying, then the case will be dismissed. A Chapter 7 defaulter can then re-file for Chapter 13 case, and a Chapter 13 case can be right away re-filed.
• If you fail to follow the repayment plan
If a debtor does not come up with the money to pay according to the plan, then it will get dismissed. When filing for bankruptcy Chapter 13 you have to be careful regarding the repayment plan. Only 30 percent of all debtors finish repaying their debt.Thus, it is important that you check up with the laws before plunging in to filing for bankruptcy which can later get dismissed.
