The Reason For Dismissal Chapter 7 Bankruptcy

With many people in America to bankruptcy, was for what could have Chapter 7 bankruptcy relief in labor. Since the Bankruptcy Code in 2005 changed was an attempt on the addition, as part of the 2005 Bankruptcy Reform Act. The only exception is an individual under this test, if a debt was primarily the debt generated by the business. Under the new bankruptcy code, there is no relief, Chapter 7 bankruptcy case concerning abuse of a provision for a presumption of abuse under the law where the debtor has failed the test. If the debt was incurred in accordance with such business, the debtor is not required to submit a test. The only way to do this kind of debtor's bankruptcy filing could have his or rejected the petition was filed in bad faith or abuse.

Bankruptcy Code provisions will not apply if the debt is consumer debt. Debt falls into this category of bankruptcy tax liability, torts, and all business debts. If the debtor filing bankruptcy fall into this category the court must have "cause" to grant the exemption. Bankruptcy Code, which has several examples of their use, and a reasonable period in which the debtor that is prejudicial to their creditors, the outstanding fees required by the court, and the last one, failure of the debtor to produce and file the necessary documents.

Since 2005, BAPCPA, the courts of appeals have held back and forth on this issue. One court has held that Congress intended to include a surplus of disposable income, and faith as a reason for dismissal from employment to consumer cases, but there is no reason for a consumer where the debt was incurred in the business. Another district court held that bad faith can not be the cause of consumer bankruptcy, but it should be applied only in cases which were horrible, because the debtor has tried to distort or conceal their assets and income sources. The court held that a debtor who had high costs, and plush living life to trying to avoid paying high total debt should be regarded as misconduct and negligence, which has a border with the intention of fraud. But at the same decision, concluded that although the costs and revenues should be considered a debtor's ability to repay debts from their disposable income is not sufficient reason to dismiss its bankruptcy filing.

If a man has a lot of business debts, but also has a high disposable income, they should be cautious of filing Chapter 7 bankruptcy. Some are in this situation, the borrower should consult with the bankruptcy lawyer or two to get some different opinions to make sure that Section 7 of the fly. Bankruptcy lawyer, who is the debtor's district will know what is acceptable and what will not work with that particular court. The debtor should also make sure that their petitions and schedules are thoroughly filled. Before filing bankruptcy debtor should review their accuracy with a fine toothed comb. If there are any discrepancies that are unlikely to go through them with your bankruptcy lawyer to see if they could be a problem.