What You Need to Know about Bankruptcy Dismissal in Arizona

When filing for bankruptcy, you carry the risk of dismissal. A court can dismiss your filing on the basis of several considerations – for failing to provide the necessary documentation, for a failure to pay mortgage, for a failure to meet creditors and in the case of suspicions about fraud attempts. You should be prepared for a lengthy process and the revision of various documents when filing for bankruptcy in Arizona. You should also be prepared for a potential bankruptcy dismissal in Arizona. Knowing how to act in such a scenario will simplify the task of refiling immediately.

When can a Bankruptcy Dismissal Occur?

The United States Bankruptcy Court District of Arizona lists the situations in which a bankruptcy dismissal in Arizona can occur. The terms and conditions are specified in Rule 1017-1 and can be viewed on the court’s website.

According to the district court, the dismissal of a case is possible under the following circumstances:

  • Whenever there’s a failure to file in a timely manner statements and schedules. In such instances, notice of proposed dismissal will be issued.
  • Whenever there’s a failure to meet with creditors, the court can dismiss the bankruptcy case without further notice.
  • Dismissal with prejudice is the worst case scenario. In such instances, the debtor will be banned from the right to file another bankruptcy petition in the coming 180 days. If there’s any suspicion of fraud, the period could be prolonged even further.

A failure to submit the needed paperwork or forms is one of the most common causes of a bankruptcy dismissal in Arizona. It’s not a major issue and the person can file for bankruptcy once again without the imposition of a waiting period.

A Means Test Failure

Bankruptcy petition could be dismissed for a means test failure, as well.

The means test compares the actual and the anticipated income of the debtor to the state’s median income. If a person earns more than the median income or they anticipate to do so in the future, a Chapter 7 bankruptcy filing will be dismissed. In that case, it will be possible to file for a Chapter 13 bankruptcy that will necessitate the repayment of at least some debt.

Whenever a person has mostly non-consumer debts, they’ll be exempt from the means test. The same applies to veterans who incurred a lot of debt while performing homeland defense activities.

What You can do in Such Situations

bankruptcy dismissal in arizonaThe fact that the bankruptcy petition has been dismissed the first time doesn’t necessarily mean it’s not going to go through the second time around.

A case dismissed due to a failure for the provision of documents or due to the inability to have a timely meeting with creditors can be reinstated once all of the needed documents are provided. A clerk will keep the case open for up to 60 days from the date of the dismissal.

Remember that pre-filing credit counseling is also mandatory. You should provide evidence of completing the course before getting to file the bankruptcy petition. If you’ve forgotten to take the course or you haven’t provided a certificate, chances are that your bankruptcy filing will end before it has even begun.

A final situation to discuss is the ability of the debtor to dismiss their own bankruptcy petition after filing.

Once you submit all of the Chapter 7 documents, it may be difficult to stop the process. A debtor doesn’t have the automatic right to dismiss the case but if there are no assets for distribution to creditors, a court may dismiss the bankruptcy without objections.

Under a Chapter 13 bankruptcy, the debtor has the right to initiate voluntary dismissal. This is one of the reasons why some people prefer a Chapter 13 bankruptcy regardless of the fact that it demands some debt repayment.