Guide to Surviving the Bankruptcy Process
Are There Any Cases When a Bankruptcy Will Be Dismissed?
Jim Bowser | July 14, 2010
Although bankruptcy cases can get dismissed by a judge, attorney Jim Bowser of Bowser & Associates, P.L.C. says this outcome is fairly rare in most of the Chapter 7 cases he sees in Mt. Clemens. As a lawyer with years of experience representing clients on these matters, he makes sure to discuss all the potential pitfalls of a bankruptcy case with his clients before beginning the process so that everyone can be as informed as possible about what filing for bankruptcy really means.
Bowser explains that when bankruptcy cases do get dismissed, this usually happens for reasons such as if a document does not get filed on time or if the court does not recognize a document that was filed on time. “Those aren’t big deals, because they will get corrected right away,” he says. What is more serious, however, is when the dismissal comes as the result of debtor misconduct. The types of misconduct that could get a debtor’s Chapter 13 or Chapter 7 case dismissed include lying, misstating the facts, and failing to list all assets.
To prevent against debtors accidentally leaving out any of this key information, Bowser and other bankruptcy attorneys are required to give a disclosure document to their clients that describes the different types of bankruptcy filings and also explains the disclosure requirement that is necessary for all bankruptcy cases. “The requirement is that there is a complete disclosure of everything—including income, debts, assets, liabilities—and also that there is no fraud,” Bowser says. “It is pretty straightforward.”
It is important that debtors do not make any of these mistakes and leave out any income or debts, whether intentionally or inadvertently, because not only can doing so prevent the case from going forward and cause the dismissal of the case, but it could also cause the debtor to not be allowed to ever file for bankruptcy again in his or her lifetime.
Even if the bankruptcy has already concluded successfully, the discovery that certain debts were misstated or inaccurate could result in the bankruptcy being reversed by the judge. “If it turns out that they have been lying or there have been misstatements, then their whole bankruptcy can be overturned and all of the debts can come back,” Bowser says. “And there is no statute of limitations on that, so that is a pretty important part of filing for bankruptcy—being honest.”
Less common, but still possible, is that people will have their bankruptcy cases dismissed because they attempted to represent themselves in their filings. Although this does happen, Bowser says it is rare for a person to represent himself in a Chapter 13 or Chapter 7 bankruptcy, since most people know that a lawyer would do a much better job. “I’d bet it’s only about 1% of the people who represent themselves,” he says.
Generally speaking, Bowser says the court is fairly patient with people who file on their own. In a tough economy though, the issue can become problematic as more and more people tend to try to represent themselves. What they will often end up causing is a backup in the court system, since they can slow things down by filing the incorrect paperwork.
For the debtor himself, however, trying to file for a Chapter 13 or Chapter 7 bankruptcy without a lawyer can mean having to come to the courthouse more often—possibly five, six, or even seven times throughout the course of the case. “So if they are taking time off of work, then that is a big waste,” Bowser says. “And it takes a lot for them to do that, so it is probably not a good idea.”
The bigger danger, according to Bowser, is that individuals who try to file for bankruptcy on their own do not know what the proper exemptions are. Therefore, they may not know which properties to list on their bankruptcy paperwork, for example, and which to leave off entirely.
Rather than wasting your time, energy, and resources trying to prepare your own case, Bowser recommends finding a qualified bankruptcy attorney in your local community or nearby area and asking him or her to take on the case. As long as you remember to disclose all of the information that is required, there is a very small chance that your case will end up being dismissed.
This article is for informational purposes only. You should not rely on this article as a legal opinion on any specific facts or circumstances, and you should not act upon this information without seeking professional counsel. Publication of this article and your receipt of this article does not create an attorney-client relationship.
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