Reasons For Bankruptcy Dismissals
Courts maintain extensive discretion and authority which frequently results in bankruptcy dismissals. Many reason for dismissals are provided by statute, and additionally, judges may exercise discretion and dismiss cases for cause based upon their judgment interpreting legal compliance. The top 5 grounds for objections and motions for dismissal are:
- Failure to timely file all forms and schedules.
- Failure to appear for the 341 meeting.
- Failure to appear for court hearings.
- Hiding, misrepresenting, or concealing assets.
- Missed Chapter 13 payments.
Avoiding dismissals and attendant prejudice
Of these top 5 reasons, all but lack of funds for payments are easily avoided, as well as the statutory prejudice against re-filing or initiating another case for a period 180 days. In Chapter 13 cases, when debtors cannot make payments, conversion of the case to chapter 7 and discharging debts may be available, subject to approval of average disposable income earned over the last 6 months.
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