When filing bankruptcy, “bad faith is present when a debtor’s actions are a clear abuse of the bankruptcy process”.
Just this past week, I had a bankruptcy client from Dalton, Georgia who was upset when she received an objection to confirmation and the car creditor in her case alleged that her bankruptcy was filed in bad faith. In my opinion, many attorneys who represent car creditors will go over the top when filing some objections to confirmation. In her case, there was absolutely no indication of bad faith.
In the twelve years that I have practiced bankruptcy, I have never had a judge rule that any of the cases that I’ve filed were bad faith cases. Before I file any bankruptcy case, I want to spend a lot time going over every detail of the case to make sure that there are no bad faith flags.
I would guess that 99 percent of the people that come into my office have no indications of bad faith. However, every now and then, that person comes into the office. About once a year, I come across a person who takes an expensive vacation right before they decide they are going to file bankruptcy. Taking an expensive vacation right before filing bankruptcy to wipe out all of your unsecured debts is a clear example of abusing the bankruptcy process.
Another example of bad faith would be racking up thousands of dollars on your credit cards right before filing.
Almost every bankruptcy attorney will refuse to file a bankruptcy case that has any indications of abusing the bankruptcy process because its not in the best interest of the client and they don’t want to damage their reputation in front a judge and other bankruptcy attorneys.
How can you know that you have a good case that won’t get thrown out of court? The answer is to hire a bankruptcy attorney who asks a lot of questions and gets a firm grasp of your entire situation.