Bankruptcy

You’ve filed for bankruptcy, and already your life has improved immeasurably. The automatic stay that was put in place has stopped the constant stream of collection notices and phone calls that you had been receiving, and that simple fact has significantly improved your quality of life. But a filing is not the same as a completed bankruptcy proceeding, and there is always the chance that your debts will not be discharged, and your case will be dismissed.

Bankruptcy dismissals generally happen as a result of problems with the process. Let’s take a look at the most common reasons they happen, what actions you can take to prevent a dismissal from taking place, and what you can do if your case is dismissed.

The most common reasons that bankruptcy cases get dismissed are that you failed to follow all of the required steps. These steps include:

• Filing all of the required forms with the court
• Filing all of the forms within the established deadlines
• Attending the required meeting with your creditors
• Submitting all of the documentation supporting your financial statement to the assigned trustee
• Completing a debtor education course
• Making the scheduled payments required in a Chapter 13 bankruptcy

When you ask the court to legally forgive your debts, it is not a magic wand or a gift that is bestowed upon you. You need to do the hard work, prove that you qualify for the relief, and follow the rules that are imposed by the law and the court. Otherwise, you will find yourself with your case dismissed and right back where you started. Fortunately, assuming that your case is dismissed ‘without prejudice,’ you will be able to immediately file for bankruptcy again. If the case is dismissed ‘with prejudice’ you may not be permitted to file again, or you may be barred from filing for a specified period of time. With prejudice dismissals occur when the court finds that your case was filed fraudulently or in bad faith.

The biggest problem with having your bankruptcy case dismissed is that you immediately lose the automatic stay and its protections from creditors, and if you refile within a year after dismissal your new automatic stay is only good for 30 days. Making matters worse, if you have two cases dismissed within a one-year period, you will lose your automatic stay with the next filing.

The best way to avoid running into the types of process problems that lead to a bankruptcy case being dismissed is to make sure that an experienced bankruptcy attorney helps you navigate the process. Contact us today to set up an appointment to discuss your situation.