In Maryland, when a person realizes they cannot continue with the daily uncertainty that accompanies hefty debt they are having trouble paying, they might consider a Chapter 7 bankruptcy. Chapter 7 is a liquidation bankruptcy that will clear unsecured debts in a relatively short time. In many instances, they can keep certain properties like an older automobile and items that they need for work.
It is important to remember that there is no guarantee debts will be discharged under a Chapter 7 filing. While most people who are upfront about their circumstances and adhere to the Chapter 7 bankruptcy requirements will generally get a discharge, there are reasons why a discharge could be denied.
Reasons why a Chapter 7 discharge might be denied
Chapter 7 is generally the easiest form of bankruptcy if the debtor provides the court with accurate and verifiable information. Still, if the debtor fails to keep adequate books and financial records, the court can refuse to grant the discharge. Some might make the mistake of failing to disclose their assets.
If, for example, they have a bank account in their name, they need to inform the court of how much is in it. A person’s financial situation is heavily scrutinized during a Chapter 7 case. Hiding assets could be seen as attempted fraud. The same is true if financial records are destroyed or they lie under oath. In short, to complete the Chapter 7 and achieve the objective of getting the debts discharged, it is imperative to be honest.
Because a person’s unsecured debts like credit cards and medical debt are cleared once the discharge is granted, the court is attentive as to whether the required information is provided and all the steps are taken. In some instances, it is a simple mistake and not a willful attempt to commit fraud. In others, the debtor might simply have failed to complete a debt management course.
Make sure your Chapter 7 bankruptcy case goes smoothly
When the financial challenges have grown so difficult that a person chooses to file for bankruptcy, their problems can be exacerbated if they are told the discharge is being denied. Often, they can simply clear up a misstep and move forward with the filing to get the sought-after discharge. In others, they might need to think about how best to move forward. Having help can prevent them from making avoidable mistakes and have a good chance at a successful Chapter 7 case.