Discharge or Dismiss
Many people get the terms discharged and dismissed confused in bankruptcy. When you file a Chapter 13, you are committed to making payments to the Chapter 13 trustee for three to five years. At anytime you fail to make payments or provide requested documentation, then it is possible that your case will be dismissed instead of discharged. What does this mean? This means that all the debt that you were trying to seek protection from can now start collecting and calling you again. It may be possible to refile the bankruptcy if you were dismissed without prejudice. If you are dismissed with prejudice, this means that you will have to wait 180 days to a year, depending on the order signed by the Judge, to refile your case. This may cause a problem, because you may be trying to protect a house or a car and if you have to wait that long, you will have to work something out with the creditor or find another car or a place to live. When you receive a discharge in a Chapter 13, this means that you have successfully completed making your payments to the trustee and you are now entitled to the discharge. A Chapter 13 will stay on your credit report for seven years from the date that the case is filed.
A Chapter 7 discharge is quicker. The total process takes about 4-5 months. Once you have completed your debtor education course that is required by law, and attended your meeting of creditors, you will receive the discharge. A discharge means that you have liquidated the debt that you were trying to seek protection from. In a Chapter 7 however, you must continue to make payments and be current on you house, car and any other secured items that you want to keep. If you decide to let these items go back to the creditor, then any deficiency balance will be taken care in when you receive your discharge. A Chapter 7 will stay on your credit report for ten years from the date that the case was filed.
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