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Not every Chapter 7 bankruptcy ends with a discharge

On Behalf of | Aug 29, 2019 | Chapter 7 Bankruptcy |

Overwhelming debt can be a major source of stress and frustration for Texas residents. Many of them turn to Chapter 7 bankruptcy for relief from these obligations, and look forward to the day when they receive their discharge and get to move forward with a fresh financial start. However, if filers are not careful, their cases could result in a dismissal instead of a discharge.

The bankruptcy process requires filers to comply with numerous rules and regulations. The failure to complete all of the necessary steps could result in an unpleasant outcome. For instance, this process is paperwork intensive. If a Texas consumer does not provide all of the required documentation, the court could dismiss the case.

Another part of the process that could result in a dismissal of the case involves the financial management course. This may seem like a minor requirement, but without completion of this course, the court could deny a discharge. Other shortcomings include failing to attend the meeting of creditors, called the 341 meeting. At this appearance, the trustee takes the opportunity to review paperwork with the filer to make sure there are not gaps and to ask questions relating to the filing. It is also an opportunity for creditors to appear and ask questions or object to the discharge of their debt.

These are not the only grounds for the dismissal of a Chapter 7 bankruptcy, but they are the most common ones. Attention to detail is vital in receiving a discharge. Even one mistake could derail a filers plans at a brighter financial future. In order to minimize or eliminate the potential for a dismissal based on a technical violation, files could consult with an experienced bankruptcy attorney who understands the court’s requirements and helps ensure all of them are met.