Filing for bankruptcy can be a valuable tool to help people and businesses with significant debt start a new financial chapter. At the end of the bankruptcy process, many of the debtor’s debts are discharged. However, sometimes the bankruptcy court denies a debtor’s petition for bankruptcy. Judges do have a right to deny bankruptcy petitions under certain circumstances, though it is rare for them to do so. 

When a judge denies a bankruptcy petition, the debtor is still liable for all of their debts as if they never filed for bankruptcy. We will discuss some of the common reasons courts deny bankruptcy petitions below and the steps you can take when your bankruptcy case is dismissed.

The Benefits of Working With a Bankruptcy Attorney to File Your Petition

When you hire an attorney at the beginning of your case who will file your petition for you, you will significantly decrease the chances that your case will be dismissed. Working with an attorney from the start can help you move through the process smoothly, without an unnecessary dismissal of your case. At the Bankruptcy Law Center, we ensure that all bankruptcy applications are complete and that all paperwork is submitted on time. We also ensure that our clients do not miss any mandatory meetings or paperwork, reducing their case’s possibility of success.

Common Reasons Judges Deny Bankruptcy Petitions

There are various reasons a judge will deny a bankruptcy petition. In some cases, judges will deny the initial bankruptcy petition. In other cases, the judge will dismiss the bankruptcy case after the bankruptcy process has already started. The judge may have dismissed your bankruptcy case for any of the following reasons:

  • You failed to file all of the appropriate forms and supporting documents
  • You did not include all of the necessary information on your paperwork
  • You failed to complete the debtor education course
  • The courts suspects that you have committed bankruptcy fraud
  • You failed to pay your bankruptcy filing fees
  • You failed to attend the mandatory 341meeting of creditors
  • You stopped making your Chapter 13 plan payments
  • The judge thinks that you are not cooperating with the bankruptcy trustee 
  • You filed for Chapter 7 bankruptcy and failed the chapter 7 means test

What Happens if a Judge Dismisses a Bankruptcy Petition?

If you are not filing for bankruptcy, one of the worst outcomes you may have to deal with is your bankruptcy case being dismissed by the judge. Bankruptcy dismissal can happen to anyone for a variety of reasons. After a bankruptcy dismissal occurs, collection activity can start again. All of your debts will be your responsibility again, and your creditors will be able to try to collect payment from you. 

Repossessions, collection calls, foreclosures, and lawsuits can all start again once the case is dismissed because the automatic stay becomes null. You will need to make some decisions quickly if your bankruptcy case is dismissed. In short, dismissal of your bankruptcy case can cause additional stress and challenges. 

If you are trying to determine which steps you should take, we recommend discussing your case with one of the experienced Attorneys at Bankruptcy Law Center. We will evaluate your case and examine the reason why the court dismissed your bankruptcy petition. Some of the problems can be easily fixed while others cannot. For example, if you failed to file the correct paperwork, you may be able to correct the problem and refile your bankruptcy petition. However, the court dismissed your case because they suspected you of bankruptcy fraud. You may need to focus on finding a criminal defense attorney to defend you in an impending criminal case against you.

Refile Your Bankruptcy Petition

As mentioned above, refiling a bankruptcy petition is sometimes an option. However, you should be careful not to become a repeat bankruptcy filer. Filing for bankruptcy multiple times likely will not solve the problem, but it can also be a red flag to judges who may see it as an indicator of bankruptcy fraud. 

However, filing for bankruptcy again is the best option in some cases. The goal, in this case, would be to fix whatever issue caused your case to be dismissed, refile for bankruptcy, and obtain a successful discharge on the second try. If you did not work with an attorney to file your bankruptcy petition, doing so will increase the court’s chances of accepting your petition. 

Appeal the Decision

Sometimes appealing the existing dismissal is the better option. If you choose this route, you will need to move quickly. Debtors only have 14 days to file an appeal after learning that the court has dismissed their bankruptcy petition. Additionally, you can only file a dismissal appeal if you can make a convincing claim that the court dismissed your case in error. In other words, a legal error or a dispute with the case’s facts led to the appeal.

Create a New Strategy

When filing for bankruptcy or appealing the dismissal of your case are not options for you, you may need to develop a strategy to pay off your debts. Working with the Bankruptcy Law Center can help you evaluate your legal options and all of your other options for paying off your debt and starting a fresh chapter. If your case has been dismissed, you will probably find yourself strapped with significant debt and dealing with aggressive collection agencies. 

It may be time to give up your car, let your house go, or try to work with an attorney to have the debts lower. You may be able to negotiate a deal with your mortgage company or car loan company that will allow you to pay manageable monthly payments. At the Bankruptcy Law Center, we will advise you of all of your different options so you can make the best choice possible.