In Florida, when a person who is dealing with overwhelming debt makes the decision to file for Chapter 7 bankruptcy, there can be a sense of relief. The fear that accompanies the constant phone calls, letters and messages from debt collectors along with an uncertain future can be eased with getting a bankruptcy discharge.
However, it is important to remember that the discharge of debts is not guaranteed. A Chapter 7 liquidation is generally the most condensed form of bankruptcy, but there are still requirements that must be met. Knowing what they are and completing them as required is a good start.
What might lead to a Chapter 7 discharge denial?
As the Chapter 7 proceeds, it is essential to understand it entirely. The courts can deny a discharge if there is justification to do so. For example, debtors are expected to have sufficient financial records. They might be asked to explain why they lost certain assets.
Those who are accused of lying about their debts and commit perjury could have the case denied. There will be lawful orders made by the bankruptcy court and the debtor is expected to adhere to them.
Property is a common reason why the Chapter 7 could be questioned and denied. For example, if a person is alleged to have hidden property that would be subject to liquidation, that could be problematic for the case. Transferring property to a relative that would have been liquidated will be scrutinized. The same can be said for property that was purchased just before the case was filed.
A denial might come about for a simple and avoidable reason like the debtor not taking the required financial management course.
Avoiding missteps when filing for Chapter 7 can help with a positive outcome
In many cases where there is a denied discharge in a Chapter 7 bankruptcy, it is because of the omission of information, a mistake or a failure to do something that is relatively simple. Chapter 7 is the most straightforward form of personal bankruptcy and lets people clear their debts and move on faster than other options.
Despite that, it is still essential to follow the requirements to avoid the case being denied. To reach the desired goal and clear medical debt, credit card debt and other unsecured debt while potentially retaining some property, it is useful to have professional help to follow the rules and avoid any unnecessary delays or denials.