Chapter 7 Bankruptcy Dismissal for Abuse

When filing Chapter 7 bankruptcy, it is quite important to be thorough with the bankruptcy trustee. If you are hiding assets or otherwise abusing the process, the bankruptcy trustee will dismiss your case. In addition to this, it is possible to face fraud charges related to the bankruptcy abuse. For this reason, work with your attorney to present a case to the bankruptcy court that fully outlines your situation.

What Is Dismissal?

There are two ways in which the bankruptcy court can dismiss your bankruptcy filing as abusive.

• There is a presumption of abuse that stems from the Chapter 7 Means test you took.
• There is grounds for other circumstances, including bad faith, which stem from all of the circumstances.

If you are found to be abusive under the Means Test, this means that you are making more money than is allowable under these guidelines. Abuse is presumed when the total monthly income you make, over the previous five years, is more than 25 percent of your nom priority unsecured debt, or is $10,950. It is possible to rebut this to avoid facing the abuse charge, such as documenting that you have special circumstances that justify having the need to spend a high amount of money each month.

In the second situation, Chapter 7 bankruptcy abuse may be reported in a number of different situations. Consider the following examples of why your bankruptcy may be dismissed.

• The petition is filed in bad faith.
• You fail to provide the necessary information in the case.
• The bankruptcy case is in some way not in compliance with the law.
• You were found to be abusing the bankruptcy process.
• You did not get the required debt management training prior to the discharge.

In most situations, dismissal will occur because you did not follow the requirements of filing Chapter 7 bankruptcy. While many people do this mistakenly, others do so fraudulently. In all situations, the bankruptcy trustee has the ability to move for dismissal of the case if he or she believes you have been abusive in your filing.

Avoid This With An Attorney

The best way to avoid a Chapter 7 bankruptcy dismissal is to work with an attorney throughout the process. The attorney will provide you with information and guidance to help ensure that you are protected and that all of the claims you make throughout the process are within the requirements of the law. An attorney ensures you are able to fight these charges, too.