Bankruptcy In The U.S. Percentage Of Chapter 7 Dismissals

If you are a resident of Austin, TX, and struggling with debt, Chapter 7 bankruptcy may be a viable option. Although there is no guarantee of a discharge, the chances of success are typically high.

In the US, approximately 99% of individual debtors who file for Chapter 7 bankruptcy have their debts discharged, which is a significant percentage. This figure excludes cases that have been converted or dismissed.

Why Would A Chapter 7 Bankruptcy Be Dismissed?

In many cases, bankruptcy courts issue discharge orders early in the process unless a complaint objecting to the discharge is filed. This means that the majority of Chapter 7 bankruptcy cases result in a successful discharge of the debtor’s debts. However, it’s important to note that each case is unique, and the outcome can vary based on individual circumstances. You should consult with a qualified attorney to determine if Chapter 7 bankruptcy is the best option for your situation.

Chapter 7 bankruptcies can be dismissed for various reasons, which can be broadly categorized into two groups: dishonesty on the part of the debtor and honest errors.

Dishonesty

Some dismissals of Chapter 7 bankruptcy cases can be attributed to dishonest debtors who attempt to conceal information in order to avoid paying all or some of their debts.

If a debtor attempts to hide a source of income, file for bankruptcy to avoid repaying a creditor, transfer assets before filing for bankruptcy, or engage in other dishonest activities, they can expect to have their case rejected. Hiding assets, lying about finances, keeping inadequate financial records, or destroying property can all lead to the dismissal of a bankruptcy case before a discharge is granted.

It’s crucial for individuals considering bankruptcy to be completely honest and transparent in their filings to avoid any potential legal consequences.

Technical Reasons

It’s true that even if a debtor is completely honest in their Chapter 7 bankruptcy filing, their case can still be dismissed for technical reasons. The 1% of Chapter 7 bankruptcy cases that are dismissed are typically due to technicalities.

Failing Means Test

This test compares the debtor’s income to the median income for a household of a similar size in their state. If the debtor’s income is above a certain threshold, they may not be eligible for Chapter 7 bankruptcy, and their case could be dismissed.

Failure To Attend Mandatory Credit Counseling

This counseling is meant to educate debtors on credit matters and prevent similar financial issues in the future. Once completed, the debtor should receive a completion certificate that is filed in court alongside other bankruptcy documents. However, it’s important to choose a recommended credit counseling agency, as the certificate may not be accepted if the agency is not approved.

Failing To Provide All The Necessary Supporting Documents

These documents may include bankruptcy petition schedules, tax returns, debt information, pay stubs, and other documents specific to the individual’s case. Ensure that all required documents are submitted and up-to-date to avoid dismissal.

Failing To Attend Creditor Meetings

These meetings are mandatory and provide an opportunity for creditors to ask questions and for the debtor to present proof. If the debtor fails to attend these meetings, their case may be dismissed. It’s important to attend all mandatory hearings with trustees and creditors to avoid dismissal.

Why Hire A Bankruptcy Lawyer From Austin Bankruptcy Lawyers?

While there are people who file alone without seeking legal help and succeed, seeking legal advice can help prevent your case from being dismissed. Unique cases should be pursued with legal assistance. That’s where a lawyer from Austin Bankruptcy Lawyers comes in. You can simply talk to a bankruptcy lawyer before proceeding. Most seasoned lawyers offer free initial consultations that can increase your chances of a favorable result. If you fall within the 1% of individuals whose Chapter 7 cases are dismissed, you may have other options.

Summary

Chapter 7 bankruptcy may be a viable option for Austin, TX residents struggling with debt, with a high percentage of individual debtors having their debts discharged. However, each case is unique, and the outcome can vary based on individual circumstances.

Dishonesty or honest errors can result in a dismissal of a Chapter 7 bankruptcy case. Dishonest debtors who attempt to conceal information may have their case rejected, and technical reasons such as failing the means test, failure to attend mandatory credit counseling, failure to provide all necessary supporting documents, failing to pay applicable fees, or failing to attend creditor meetings may also lead to dismissal.

It is important for individuals considering bankruptcy to be honest and transparent in their filings and to consult with a qualified attorney to determine if Chapter 7 bankruptcy is the best option for their situation.