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Why could a trustee deny your bankruptcy?

Bankruptcy is supposed to be an individual's refuge of last resort when the bills are piled sky high and creditors are howling like wolves at the door.

Anyone can fall on hard times and the bankruptcy court doesn't really judge those unlucky enough to walk through the doors. People who have lived in relative wealth and comfort their whole lives file bankruptcy just like people who have struggled for every dime.

So, why then, might a bankruptcy trustee deny you a discharge of your debts? Here are some possible reasons:

You lied on your paperwork

It's important to keep in mind that every form you complete for the bankruptcy is signed under oath. That means that you absolutely cannot take creative license with the truth. It also means that if you don't understand something, you need to ask your attorney what it means before you commit an answer in writing.

You have missing assets

Trustees are smart. Most of them are also tech-savvy young attorneys. Don't think anything will escape their notice. For example, that classic car you took to shows last year and proudly displayed on your Facebook page could be a problem if you can't explain what happened to it to the trustee's satisfaction. Money that disappeared from your account better have been put to an identifiable use -- or the trustee may assume you're hiding it.

You concealed information

People get into trouble all the time for trying to hide something that they don't want to acknowledge. Sometimes they're only trying to hide it from their spouse -- but the trustee regards all concealment the same. Are you keeping a storage unit full of thrift store finds that you don't want to tell your husband about? Do you own a motorcycle you're secretly storing at your brother's, even though you told your wife you sold it? Confess everything and don't attempt to hide anything from the trustee.

You're uncooperative

Filing bankruptcy isn't exactly anybody's idea of a good time. However, there are steps that have to be taken in order to comply with the law. When a trustee asks you to do something -- whether it's take a class on financial management or dig out a pile of old receipts -- do it. Otherwise, you'll force the trustee's hand.

Avoid these mistakes and you'll find yourself through the bankruptcy process in no time.

Source: the balance, "Can Your Bankruptcy Discharge Be Denied?," David Haynes, accessed March 27, 2018

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