Can You Be Denied Bankruptcy in Texas?

While the idea of filing for bankruptcy might be daunting, the option of declaring bankruptcy can be the key to a fresh start and overcoming your financial hardships after time. The process of bankruptcy is complex and includes a number of legal steps. Additionally, individuals filing for bankruptcy must meet certain requirements in order to do so. If you’re wondering, “Can you be denied bankruptcy in Texas?” the short answer is yes.

Sometimes, attempts to file for bankruptcy are unsuccessful. This is known as bankruptcy denial. Learn more about why your bankruptcy case could be denied and discover how hiring a Dallas bankruptcy lawyer could be essential to successfully filing for bankruptcy in Texas.

Understanding Bankruptcy Discharge vs. Bankruptcy Denial

When you file for bankruptcy, you are essentially submitting an official legal request for certain debts to be forgiven and to no longer be held liable for repaying those debts. If a bankruptcy case is successful, your qualifying debts will be discharged. This makes those debts ineligible for debt collectors to attempt to recover the amount of money you owe. If you are filing for bankruptcy, your ideal outcome is for the court to rule in favor of a bankruptcy discharge.

Conversely, your bankruptcy case would be considered unsuccessful if it is denied by the courts. A bankruptcy denial means you are still legally required to pay the full amounts you owe for your debts. This means collection agencies can pursue legal action to seize assets in order to recover expenses for your outstanding debts and money owed.

Reasons for Bankruptcy Denial

The courts could deny your bankruptcy case for a number of reasons in Texas. There are different requirements you, as a debtor, must meet in order to qualify for Chapter 7 or Chapter 13 bankruptcy. Working with an experienced bankruptcy attorney can help you understand the filing requirements. Some of the common causes of bankruptcy denial include:

• You do not meet the income requirements. It may seem odd, but you might earn too much or not enough money to qualify for bankruptcy, depending on the type of bankruptcy you’re filing for. In order to qualify for Chapter 7 bankruptcy in Texas, your family’s gross income must be lower than the median income for a family of the same size in the same state. For Chapter 13 bankruptcy, you must make enough to meet the monthly payments.
• You did not complete the necessary forms. The process of filing Chapter 7 and Chapter 13 bankruptcy involves multiple steps and requires you to complete legal paperwork and provide documentation of your finances along the way. If you do not complete the required forms, you could face bankruptcy denial and be held liable for the entirety of your debts.
• You misrepresented your financial situation. Lying about your income or hiding assets you own in a bankruptcy case is considered bankruptcy fraud, which is illegal. If the court discovers that you have committed bankruptcy fraud, not only will your case likely be dismissed, but you could also face criminal charges punishable by fines and jail time. For this reason, it is important to be forthcoming about your financial situation when filing for bankruptcy.

This is not an exhaustive list of reasons why a bankruptcy case could be denied. By working with a knowledgeable Texas bankruptcy attorney, you can have a better understanding of the causes of bankruptcy denial. Additionally, a bankruptcy attorney can review the specifics of your financial situation and could give your case the advantage it needs to be successful.

FAQs

Q: Why Would I Get Denied for Bankruptcy?

A: There are multiple reasons why you could get denied for bankruptcy. The exact reasons will depend on whether you are filing Chapter 7 or Chapter 13 bankruptcy. Some common causes for bankruptcy cases being denied are failing to file the correct forms, issues with the amount of money you earn, having too much debt, or committing bankruptcy fraud by lying about your financial situation.

Hiring a bankruptcy attorney could give you a better chance of having your debts discharged in a successful bankruptcy case.

Q: What Would Disqualify Me From Chapter 7?

A: Something that would disqualify you from Chapter 7 bankruptcy is if you make more than the median annual income for other individuals within your state. If you are filing for bankruptcy as a family, you could be disqualified from Chapter 7 bankruptcy if your family’s annual income is greater than the median income for a family of your size within your state. It is possible to earn too much money to qualify for Chapter 7 bankruptcy.

Q: Can the Court Decline Bankruptcy?

A: Yes, the court can decline bankruptcy cases. An ideal outcome when filing for bankruptcy is for your debts to be discharged, which means you are no longer legally required to pay those debts. However, the court can decline your bankruptcy case, which means you are still financially responsible for the total payments of your debts.

If your bankruptcy case is denied, collection agencies and the Internal Revenue Service have the ability to take legal action in order to seize your assets to pay back the money you owe.

Q: What Are Reasons You Might Not Want to File Bankruptcy?

A: There are several reasons why you might not want to file bankruptcy, including:

• Your credit score will likely drop, making it difficult to get approved for certain loans.
• You might face an eviction or have challenges with renting properties in the future.
• Certain assets you own could be repossessed or seized by debt collection agencies.
• You could have trouble being approved for a home loan.

Talk to a Bankruptcy Attorney in Dallas, Texas

If you are considering bankruptcy, you need to understand your options and recognize the likelihood of your bankruptcy being denied. The legal team at Steele Law Firm, PLLC, has in-depth knowledge of bankruptcy laws and can provide the legal guidance you need, which could help your bankruptcy case’s outcome. Contact Steele Law Firm, PLLC, today to request a consultation with an attorney who can help you take control of your financial situation.