Can Chapter 11 Bankruptcy in Arkansas Be Denied?

What are the reasons a bankruptcy can be denied? What options are available to you after a denial? Let’s shed some light on these topics.

Bankruptcy is a complicated process and should never be taken lightly. Chapter 11 can help you alleviate your debt, but the process comes with many drawbacks. Large corporations, small business owners, or even just individuals with outstanding debt can use bankruptcy to reorganize their finances towards a better future. But what happens if the process is denied? What are the reasons a bankruptcy can be denied? And what options are available to you after your bankruptcy is rejected? Let’s cover these questions and shed some light on what happens if your chapter 11 bankruptcy is denied in Arkansas.

Reasons A Bankruptcy Can Be Denied

First, bankruptcy can be denied if a previous bankruptcy petition was dismissed within the last 180 days. This means if an Arkansas court denies your bankruptcy, you must wait roughly six months to try again. During this time, the automatic stay protection is revoked, and your creditors are well within their rights to continue attempting to retrieve their money.

Another way a bankruptcy petition can be denied is if the business or individual filing for bankruptcy does not complete credit counseling from an approved organization. The court recruits credit counseling organizations to help educate the filing entity on how they may have found themselves in this predicament. Credit counseling also educates debtors on their options for recovery. If this step isn’t taken in the 180 days leading up to the filing of chapter 11, the court will deny the bankruptcy.

Dismissal With Prejudice

When a deadline is missed, or court procedure is not followed, the bankruptcy can be denied by way of “dismissal without prejudice.” A dismissal with prejudice is when the bankruptcy is rejected due to dishonesty or abuse on the part of the petitioner. An example of this would be if an individual attempted to hide assets or filed the case in bad faith, or was dishonest in filling out the bankruptcy paperwork. Individuals who have their bankruptcies dismissed with prejudice may be barred from filing bankruptcy again for a period of time or barred from having those debts discharged permanently.

What Do I Do If My Bankruptcy Is Denied?

The short answer is to work with your attorney. They will be able to help you change your bankruptcy petition, so it’s accepted by the court next time you file. Be honest and accurate about your assets and reorganization plan, and always meet each deadline or condition the court requires.


If your chapter 11 bankruptcy has been denied, or for more information on the specifics of your petition, call Natural State Law, PLLC at (501) 916-2878.