Common Mistakes in Bankruptcy Cases
When filing a bankruptcy case there are many things that can go wrong, especially if you are attempting to file without an attorney or a properly trained bankruptcy professional. Countless mistakes can be made when you are not paying attention to the little details, do not know the specific rules for your state and chapter, or if you just are not taking the severity of the process seriously.
It is important to understand the difference between having your chapter 7 bankruptcy discharge and having your bankruptcy filings dismissed. A discharge means that your eligible debts listed in your chapter 7 bankruptcy petition have been completely forgiven and that the owners of that debt, your creditors, can't continue to go after you for the debt by calling you and filing law suits against you. A dismissal means that the trustee or the bankruptcy judge closed your bankruptcy case without forgiving your debts and granting the discharge. When your case is dismissed without a discharge everything goes back to normal and your creditors may resume the process of collecting their debts.
Though there are multiple problems that can arise that will cause your chapter 7 bankruptcy filings to be dismissed rather than discharged, here are the four most common slip-ups you can make:
- Filing only a partial petition: Sometimes, you may be in a bit of a rush when you are first filing your chapter 7 bankruptcy petition (possibly because you are trying to prevent a foreclosure on your home) and you may opt to file the more brief "skeleton" petition in order to get the bankruptcy process started as soon as possible. This is fine, but DO NOT make the mistake of thinking that this is the only petition you need to file! Often people will file this abbreviated petition and will forget to later file the more complete petition (containing the creditor list, schedules, etc) REMEMBER the court only grants you 14 days after filing the "skeleton" petition to file your complete petition. If you don't, your case will be dismissed.
- Not providing tax returns: Before your first meeting with the trustee you are required to provide them with a copy of your most recent tax returns, or transcripts from the IRS of your most recent tax returns. If you do not provide these the trustee will most likely file a Motion to Dismiss your bankruptcy petition.
- Not attending your first meeting of creditors (341 meeting): This is usually your only opportunity to meet with the trustee. It is at this meeting that the trustee will ask you important questions about your bankruptcy petition and the status of your finances. Additionally, the law requires that you attend this meeting in order to verify your identity and residency and to be sworn in. If you do not attend this first meeting (and do not attempt to reschedule the meeting beforehand) the trustee will probably dismiss your case.
- Not taking your debtor education class: This is really the final step in a typical chapter 7 bankruptcy. The process of receiving the certificate for this class is very similar to the process of receiving your certificate for your pre-filing credit counseling class. This has to be taken and filed following your 341 meeting of creditors within a certain deadline. If you do not file the certificate within that deadline your case will be closed without a discharge and you will have to pay a new filing fee to reopen the case.
The best way to make sure that your chapter 7 bankruptcy follows the necessary steps to discharge is to hire a Bankruptcy attorney to guide you. Carmen G. Soto, Esq. a bankruptcy attorney in Fort Lauderdale is well versed in the intricacies of filing bankruptcy petitions and can help direct you around the common, and uncommon pitfalls that can prevent your discharge. Call today for your FREE 30-minute consultation.