How Bankruptcy Cases Often Get Dismissed

How Bankruptcy Cases Often Get Dismissed

When bankruptcy debtors do not meet specific filing requirements mandated by the Bankruptcy Code (Title 11 of the U.S. Code), specifically those imposed by § 521, they face dismissal of their bankruptcy case. When bankruptcy debtors do not file the documentation required by federal law in its entirety, the “automatic dismissal” provisions under 11 U.S.C. §521(i) may apply.

Debtors must provide a detailed summary of liabilities, assets, income, and expenses. Schedules, a statement of financial affairs, and other miscellaneous documents must be filed with the bankruptcy court within 14 (fourteen) days of filing the bankruptcy petition.

Debtors file this information with the bankruptcy court under penalty of perjury. Thus, this voluminous collection of documents must be completed to their utmost accuracy. Qualified bankruptcy counsel can help ensure that this information is complete and correct, thus, preventing any chance of dismissal under § 521.

An assigned trustee must review each case to determine whether the debtor has complied with all filing requirements set forth in 11 U.S.C. §521(a)(1) to the trustee’s satisfaction. The trustee must file an electronic statement with the court that provides:

“The information required by 11 U.S.C. §521(a)(1) as provided by the debtor(s) in this case is complete to the satisfaction of the trustee.  No creditor or other party in interest has filed a request for an order of dismissal pursuant to 11 U.S.C. §521(i)(2) and the trustee does not believe that this case is subject to automatic dismissal pursuant to 11 U.S.C. §521(i).”

A chapter 7 trustee is required to file this statement no later than the deadline set by the court for filing complaints objecting to discharge, and the chapter 13 trustee must file this statement prior to entry of an order confirming the chapter 13 plan of reorganization.

Once the trustee files this statement, the court enters an Order Determining Debtor’s Compliance With Filing Requirements of §521(a)(1). Notice of this order (and the order itself, of course) are served on all creditors and parties in interest. The order states that the case is not subject to automatic dismissal under 11 U.S.C. §521(i)(1) or (2).

If the trustee has determined that the debtor has not met the filing requirements of  §521, and the court has not otherwise waived or extended the deadline for filing, the trustee must file a motion to dismiss the case no later than the deadlines established for filing the trustee statement.

Bankruptcy helps good Americans escape financial hardship and start over again. Call the Morrison Law Group at 801.456.9933 today to schedule a FREE consultation. We are Utah’s only statewide bankruptcy law firm and have locations in Ogden, Logan, Sandy, and St. George to serve the residents of the counties of Weber, Cache, Salt Lake, Utah, Morgan, Davis, Washington, and surrounding areas.

Theron Morrison

Theron Morrison

Utah’s top bankruptcy and consumer protection attorney.