Bankruptcy Filing Information

Article Written By: stitchrojas1

According to the American Bankruptcy Institute, 1.5 million U.S. consumers have declared bankruptcy. The law is really clear and for individual or couple that are considering filing they must know Bankruptcy Laws.

Bankruptcy filing does not come without side effects. While it does guarantee a new beginning, that beginning includes factors that will impact the person's lifestyle for many years to come, such as not being able to borrow money.

For those that have considered all options, Chapter 7 and Chapter 13 can be filed to help reduce debt. However, there is no guarantee that each case filed within the courts will be accepted and for those that are filing Chapter 7 or Chapter 13 information is essential and it is important to familiarize yourself with the reasons why your case may be rejected. The following suggestion will help you to understand why you may receive a rejection on your bankruptcy filing from the courts:

1. You don't pass the courts "means" test.

Simply put, the means test is a court executed test which is used to determine your disposable income. If the court considers you to have a sufficient amount of money your Chapter 7 bankruptcy filing may be rejected. For those that do have their case rejected they are still able to consider filing for a Chapter 13.

2. You are not present at your creditor meeting or do not present requested tax documents.

Roughly around one month after you have filed your bankruptcy petition, a meeting will be scheduled. During this meeting creditors will have the opportunity to be present. The meeting is fairly simple and lasts about 10 minutes. During the 10 minutes, you will be asked to verify your identity, confirm basic information that is addressed in your bankruptcy filing and to present your tax returns.

The process normally takes about 10 minutes. If you fail to present provide your requested tax documents, the court may reject or "dismiss" your bankruptcy case. With Chapter 7 filing it is necessary to file your tax documents with the court as well or your debts will not be eliminated. When filing a Chapter 13 it is necessary to file tax returns for a period of four years prior to your filing. If you fail to do so, your Chapter 13 repayment plan will be rejected.

3. Your repayment plan proposal is not reasonable.

When filing Chapter 13, you have a set amount of time for debt repayment which is anywhere from three to five years. When you file, your repayment schedule must be a plan that is reasonable in order to be accepted by the courts. The repayment plan will be reviewed and review your current income, assets and debts to determine whether the repayment plan is realistic. Should your plan be rejected, you can file again with a more appropriate proposal.

4. Your bankruptcy request is challenged.

When filing Chapter 7, creditors do have the right to challenge your debts. This can be done if the creditor feels you committed fraud or were dishonest. Should a challenge occur, your Chapter 7 discharge could be revoked or denied.

About the Author

Knowing Bankruptcy Laws is essential when you find yourself in a financial crisis in which there is no way out. Simply visit www.bankruptcydistrictcourt.com.

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