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Reasons Why a Bankruptcy Claim May Be Denied

Posted on in Bankruptcy

Reasons Why a Bankruptcy Claim May Be Denied

When you file for bankruptcy, your claim is not automatically approved. It is possible for the court to deny your claim, putting you in a position in which you continue to face difficulty managing your debt and are subject to collection attempts from your creditor. Why would the court do this? There are a few reasons why a bankruptcy claim may be denied, which are discussed below. For further information and guidance through your bankruptcy case, work with an experienced bankruptcy attorney who can act as an advocate for your rights and interests.

You Lied or Falsified your Information

Filing for bankruptcy involves submitting a significant amount of paperwork to the court. This paperwork communicates your current financial situation so they court can effectively direct your case and help you get your debt under control. If the information you submitted is found to be fraudulent, your claim may be denied. This includes instances where you are found to have lied by omission – you need to be upfront about all aspects of your current financial standing when you file for bankruptcy. Do not lie about your financial situation in an attempt to give your case a better chance of succeeding – this almost always backfires. Instead, work with your attorney, your lenders, and your financial institution to create a comprehensive guide to your assets and debts.

You Did Not Comply With the Court's Orders

As a bankruptcy claimant, there is a strict set of rules from the court that you are required to follow. These rules include appearing at a creditors' meeting and completing a financial education course. Failure to do so can lead to having your claim denied.

Your Bankruptcy Plan is Not Feasible

When you file for Chapter 13 bankruptcy, you work with the court and your trustee to determine a workable repayment plan. These plans usually last from three to five years. If your plan seems unrealistic, it may be denied and you could have to develop a new plan to submit to the court for approval.

You Lost your Assets and Cannot Explain the Loss

If you cannot adequately explain an asset loss, your bankruptcy case may be denied. All transfers of property made within one year of filing for bankruptcy must be fully documented and submitted to the court for approval. Otherwise, your actions may be construed as an attempt to defraud the court, which can lead to your case being dismissed.

Work With a Chicago Bankruptcy Attorney

Before you file for bankruptcy, speak with an experienced Chicago bankruptcy attorney to determine all of your options and to minimize your claim's chance of being denied. Our team of bankruptcy attorneys at Newland & Newland, LLP, can work with you to give your claim the best chance possible for success. Contact our firm, which is now located in suite 3700 of the prestigious 180 N. LaSalle Street building, to schedule your free legal consultation with a member of our team.

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