Legal Definitions - bad-faith filing

Definition: Bad-faith filing is a term used in bankruptcy law to describe the act of submitting a bankruptcy petition that goes against the purpose of the Bankruptcy Code or is an abuse of the bankruptcy system. This means that the petition is not filed in good faith.

For example, if someone files for bankruptcy even though they have enough money to pay off their debts, this would be considered a bad-faith filing. Another example would be if someone files for bankruptcy just to delay or avoid a legal proceeding, such as a foreclosure or eviction.

If a court finds that a bankruptcy petition was filed in bad faith, it may dismiss the case. This means that the person who filed for bankruptcy would not receive the benefits of bankruptcy protection and would still be responsible for their debts.