Can You Appeal a Denied Bankruptcy Discharge in Pennsylvania?
Thanks to the term “declaring bankruptcy,” many people incorrectly assume that a debtor can simply say they are bankrupt and instantly wipe away their debts. Unfortunately, the process isn’t quite that simple, as our bankruptcy lawyers will explain in this article. If you’re thinking about filing for Chapter 13 or Chapter 7 in Pennsylvania, it’s important to understand the different ways your case could potentially conclude – and what to do if you don’t agree with the court’s findings.
Bankruptcy Dismissal vs. Discharge in Chapter 7 and Chapter 13
As long as you have not filed for bankruptcy in the recent past, you are free to file a petition for Chapter 7 or Chapter 13 bankruptcy at any time. (If you have filed recently, you may need to wait for several years to pass before you can file for bankruptcy again.)
However, in order for the bankruptcy to be finalized so that you can be officially released from your debts, your case needs to be discharged by the bankruptcy court – and not all cases end in discharge. Some cases are dismissed instead.
The difference between discharge and dismissal is critical. If a case is discharged, it means you have satisfactorily complied with all requirements of the bankruptcy process, and you are no longer legally liable for further repayment of your debts. Your creditors cannot continue to pursue you for repayment, and you can start moving forward with a clean slate.
If a case is dismissed, it means just the opposite: the court was dissatisfied with one or more elements of your case, and has therefore determined that granting a discharge would be inappropriate. Since your case was not discharged, your creditors can still come after you for repayment. Some common reasons a bankruptcy could be dismissed include:
- Failure to comply with the credit counseling and debtor education requirements.
- Lying about your debts and assets on your paperwork (e.g. exaggerating debts or concealing assets).
- Missing deadlines or forgetting forms.
A case can be dismissed with or without prejudice. If your case is dismissed without prejudice, you can generally file again at any time. If your case is dismissed with prejudice, you will have to wait for a limited period of time until you can file again, and moreover, may not be able to discharge as many debts in the future.
How the Bankruptcy Appeals Process Works
At this juncture, there are a few paths you can take. You can:
- File again immediately (for cases dismissed without prejudice).
- Under certain circumstances, such as intentionally failing to follow court orders, you may be required to wait for 180 days.
- Be advised the duration of the automatic stay will be reduced to just 30 days in cases where a dismissal occurred within the past year.
- Wait until the time limit elapses and file again.
- Appeal (challenge) the ruling.
It’s important to consult with a bankruptcy attorney when you’re deciding whether you should appeal or file a second time. Both strategies have pros and cons which must be weighed carefully on a case-by-case basis.
If you do decide to appeal, you need to move fast. In accordance with Rule 8002(a)(1) of the Federal Rules of Bankruptcy Procedure, with a few exceptions you have just 14 days to file a Notice of Appeal with the bankruptcy clerk. The two-week deadline starts counting down from the date the judgment is entered – and if you miss it, your legal recourse will be severely limited. Even if you aren’t sure whether appealing is right for you, you should ask a lawyer immediately in order to give yourself as much time as possible. Your attorney will handling filing the Notice for you.
Once the Notice of Appeal has been filed, the appeal will be heard by either a BAP (Bankruptcy Appellate Panel) or a district court. The burden of proof falls on you to establish that the original dismissal was “clearly erroneous,” meaning the court made a mistake that led to an incorrect ruling.
As a final word of caution, debtors should bear in mind that the appeals process is notoriously complex – even in the notoriously complex world of bankruptcy law! All debtors who are considering appealing are strongly urged to seek legal representation, as success hinges on the ability to demonstrate that a significant legal error compromised the original ruling.
A dismissal is always discouraging, but don’t give up just yet. The attorneys of Young, Marr & Associates may be able to help you appeal, regardless of whether you filed for bankruptcy in Pennsylvania.
Our Pennsylvania Bankruptcy Lawyers Can Help You Appeal
If you’re thinking about filing but aren’t quite sure whether it’s the right choice, we invite you to call a bankruptcy lawyer at (215) 701-6519 in Pennsylvania to talk about your options in a free, completely confidential legal consultation. We have decades of experience handling thousands of cases, and will help you make an informed decision about whether bankruptcy could be right for you.
☑ Been paying credit card balances that seem to never go down?
☑ Lost your job and are now having trouble keeping up?
☑ Attempted to work out a payment arrangement to no avail?
☑ Been notified of a mortgage foreclosure action?
☑ Been denied for a mortgage or other line of credit?
If the answer to any of these questions is “yes” then bankruptcy may be an option that you should consider.