Why would a chapter 7 bankruptcy case be dismissed?

There are many reasons for dismissing chapter 7 bankruptcy. A debtor, creditor or the bankruptcy trustee can request a dismissal of a bankruptcy case. If a dismissal of a chapter 7 bankruptcy for cause is requested, the court must give notice to all parties and a hearing must be provided. A dismissal of a chapter 7 bankruptcy case for cause may occur if a defect exists in the bankruptcy case. Examples of a defect include improper prosecution, or fraud. 

A chapter 7 bankruptcy can also be dismissed if the debtor does not qualify for chapter 7 bankruptcy. For example, if the debtor does not pass the means test then her bankruptcy petition will be dismissed. However, if the debtor fails the means test, the debtor may still be able to convert her chapter 7 bankruptcy to a chapter 13 bankruptcy.

A bankruptcy will also be dismissed if there is evidence of bad faith, such as a debtor lying on the face of the bankruptcy petition or the concealment of assets. Additionally, a debtor must comply with certain requirements when filing for chapter 7 bankruptcy, like receiving credit counseling prior to filing a bankruptcy petition.

If you are considering filing for bankruptcy, contact an experienced bankruptcy attorney as soon as possible.