Bankruptcy dismissal-What to do after dismissed bankruptcy

Community Mentor

Ask Jessica

Posted on: 24th Dec, 2005 10:30am

If you are facing difficulty to make payments on your debts and want to get rid of them, you can file bankruptcy (BK) to have them discharged. However, in certain situations, your BK case can be dismissed even before your debts are discharged. Bankruptcy dismissal refers to the pre-mature closure of your case prior to getting a discharge. Read through the sections below to find out the reasons behind dismissal and what options you have after the dismissal.

When can bankruptcy be dismissed?
What happens after a bankruptcy dismissal?
Do you have any option after the dismissal?
How does a dismissal affect your credit?

When can BK be dismissed?

Chapter 7 can be dismissed under the following circumstances.

Voluntary dismissal: If you do not intend to go ahead with your BK case, you can request the court to have it dismissed. The judge will dismiss your case, as long as he thinks it does not affect your creditor's ability to collect the debt from you.

Inability to follow rules: If you fail to follow the BK rules, your case can be dismissed for the following reasons:
1. You do not pay the fees and costs associated with BK.
2. You cause unnecessary delay in your case.
3. You do not file necessary paperwork and fail to provide the court with required information.
Abuse of Chapter 7: If you abuse the Federal laws regarding chapter 7, it can result in a dismissed bankruptcy under the following circumstances:
1. You filed your case in bad faith
2. You have filed Chapter 7 even though you can pay off most of your debts through Chapter 13.
3. You live a luxurious life even after filing BK.

Your Chapter 13 case can be dismissed under the following situations.
1. You do not file a repayment plan within time.
2. You fail to make timely payments.
3. Your repayment plan is not confirmed or your request for additional time to file another plan is denied.

What happens after a bankruptcy dismissal?

Once you file BK, the automatic stay comes into effect. This stops your creditors from taking any action against you, like a foreclosure, garnishment, lawsuit, etc. After the case is dismissed, the automatic stay is revoked and your creditors are free to come after you for the outstanding debts.

Do you have any option after the dismissal?

You always have the option of re-filing bankruptcy after dismissal. However, if you re-file within 1 year of the previous dismissal, the automatic stay will be effective only for a period of 30 days. You will have to file a motion to extend the stay immediately after re-filing your case. The BK judge will assess your situation and will either accept or deny your request for the extension.

However, you cannot re-file your case after dismissal, if your previous Chapter 7 or Chapter 13 case was dismissed within the last 180 days for the following reasons:

You had your previous bankruptcy dismissed after a creditor sought relief from automatic stay.
You did not obey court order.
Your previous filing was considered fraudulent.

How does a dismissal affect your credit?

A dismissal affects your credit in a negative way. It shows up on your credit report for 7-10 years, though its adverse impact diminishes with time.

Ask Question

Samantha

Posted on: 24th Dec, 2005 10:30 am

I filed a BK which was dismissed. Any options left now?

Total Reply : 347

My BK has been dismissed w/out any notification to me. I lost my job, & got behind on my payments. I've tried numerous times to contact my BK atty. He will not return my calls. My home was flied on my BK. I'm now starting a new job as of next week. What should I do? Thank you :(