Contact us today for a

FREE consultation to discuss bankruptcy or estate planning options

John Goetz Law, PLC
Bad Faith Can Be Your Downfall - Bankruptcies Must Be Filed In Good Faith
March 26, 2025

Determine if your case would be in danger if you filed your case for the wrong reasons

When filing for bankruptcy, it is important that you do it for the right reasons. There are times when your case can be dismissed because you didn't file a case in "good faith".  Some factors considered by bankruptcy courts to determine if a petition is filed in good faith include, but are not exclusive to, eleven factors that include:

(1) The debtor's concealment or misrepresentation of assets and/or sources of income, such as the improper or unexplained transfers of assets prior to filing;

(2) The debtor's lack of candor and completeness in his statements and schedules, such as the inflation of his expenses to disguise his financial well-being;

(3) The debtor has sufficient resources to repay his debts, and leads a lavish lifestyle, continuing to have excessive and continued expenditures;

(4) The debtor's motivation in filing is to avoid a large single debt incurred through conduct akin to fraud, misconduct, or gross negligence, such as a judgment in pending litigation, or a collection action;

(5) The debtor's petition is part of a "deliberate and persistent pattern" of evading a single creditor;

(6) The debtor is "overutilizing the protection of the Code" to the detriment to his creditors;

(7) The debtor reduced his creditors to a single creditor prior to filing the petition;

(8) The debtor's lack of attempt to repay creditors;

(9) The debtor's payment of debts to insider creditors;

(10) The debtor's "procedural gymnastics" that have the effect of frustrating creditors;

(11) The unfairness of the debtor's use of the bankruptcy process. 


Share by: