The purpose of bankruptcy is to give a person, or business, a fresh start or a reasonable way to pay back existing debt. If your bankruptcy is not filed accurately, or completely, you may not get your fresh start or reasonable plan to repay existing debt.

Dismissals and Other Consequences of Errors

One reason it is important to ensure your bankruptcy filing is accurate and complete is that courts have great authority to dismiss bankruptcy cases that do not comply with the law.

Whether you have an attorney or not, you are expected to know and comply with all bankruptcy laws and rules.

  • A court may dismiss a case because a required document was not filed, or because a required document was not filed completely or accurately.
  • A court may dismiss a bankruptcy case if the court believes there is fraud contained within the filed documents.
  • If a person fails to obtain required credit counseling, and file the necessary proof, a court may dismiss a bankruptcy case.

Even if a court does not dismiss a case, errors may cause a court to not grant you the full potential benefit of the bankruptcy. For instance, if you forget or fail to list an existing debt in your bankruptcy schedule, a court may determine that that debt will not be discharged.

You may also have options other than bankruptcy that you may not realize, which would save you from the negative results of a bankruptcy proceeding. For example, homeowners who are having trouble or have fallen behind in making their mortgage payments may have options that would allow them to avoid foreclosure and bankruptcy. Therefore, you can see it is important to be accurate and complete, and have a good understanding of what is required.

Be Careful Who You Trust

You may also consider that there will be some people who do not have your best interests in mind. Beware of offers made once your house is in foreclosure – there are a number of fraudulent schemes specifically directed at individuals facing foreclosure.

Contact your state attorney general or other state consumer protection agency regarding any suspicious proposal, such as one that requires transferring your property to a third party in order to avoid foreclosure.

Beware of bankruptcy petition preparers who do not comply with all legal requirements. The role of non-attorney petition preparers is solely to type information on bankruptcy forms, which are available on the United States Courts website at no charge.

Petition preparers are barred by law from providing legal advice – they cannot explain how to answer legal questions or assist in bankruptcy court. Petition preparers must sign all documents they prepare; print their name, address, and social security number on such documents; and furnish copies to the debtor. They cannot sign a document on the debtor’s behalf or receive payment from the debtor for court fees.