Can my Chapter 7 Bankruptcy be Denied in New York City?

Chapter 7 bankruptcy is a complicated process and not everyone will automatically qualify in New York City.  There are a number of reasons a Chapter 7 bankruptcy discharge could be denied, but rest assured if you are truly underwater on your bills and unable to make ends meet there is a bankruptcy solution that can help.  If you have recently lost your job, have an excessive amount of credit card debt, or have been stricken by a medical emergency you might already be considering filing for bankruptcy to get a fresh start on your finances.  Speak to a qualified bankruptcy attorney about your situation because filing bankruptcy incorrectly could do more harm than good.

A Chapter 7 bankruptcy discharge will eliminate the vast majority of your unsecured debts, but in order to qualify you must first pass the bankruptcy means test.  The means test helps the bankruptcy court in New York City determine how much disposable income you have.  If you have too much disposable income you will fail the means test and the court will deny your bankruptcy request.  However, a good attorney can help prepare you for the means test, or may advise another bankruptcy strategy like Chapter 13 if they believe you will be unable to qualify for straight Chapter 7 protection.

Beyond failing the means test your Chapter 7 bankruptcy petition could also be rejected for fraudulent transfers, for the concealment or falsification of financial documents, for refusing to obey a lawful order of the court, or if a creditor successfully challenges the discharge.  Fraudulent transfers can actually be quite tricky.  Not everyone who commits a fraudulent transfer is knowingly breaking the law.  The other issues mentioned above typically come from some type of dishonest or concealing behavior.  Even if you have been sneaky, the best thing is to be completely open and honest with your bankruptcy attorney about your finances.  They can only help if they understand the big picture of your debt troubles as well as the attempts you may have made to correct them on your own.

The important thing to remember is that just because your Chapter 7 case is denied doesn’t mean it will stop.  Once you file your case you cross the point of no return. If your case is rejected the Chapter 7 bankruptcy trustee will still liquidate any of your non-exempt assets while denying your discharge at the same time- essentially a complete bankruptcy backfire.  If you are honest with your bankruptcy attorney you will have nothing to fear.  Don’t lie, destroy documents or knowingly hide assets if you can help it.  If you live in New York City get the facts for yourself and contact the Law Offices of William Waldner online or at 212.244.2882 to arrange a free bankruptcy consultation today.  We only practice bankruptcy law and maintain a 99% Chapter 7 bankruptcy discharge record in New York City as of 8/31/16.

**** DISCLAIMER: This article is intended for educational purposes only. By reading no attorney-client relationship has been created. Prior results do not guarantee a similar result for future clients.