A bankruptcy dismissal can occur if the Bankruptcy Court stops the bankruptcy case and instead of granting the Debtor relief by discharging their debts, lifts the Automatic Stay, allowing the creditors to continue all legal debt collection efforts.
Fees for filing bankruptcy are not reimbursed. If a bankruptcy case is dismissed by the bankruptcy court, the bankruptcy case is closed and no further rulings will be made under that bankruptcy case number. Dismissals can occur for a variety of reasons including: the misstatements or errors made by the petitioner, violations of the bankruptcy court processes and dismissals with or without prejudice.
Possible Reasons for Bankruptcy Dismissal
- Misstatements or misrepresentation: A petitioner does not accurately disclose information pertaining to their assets, provides insufficient documentation about their financial status or attempts to eliminate debts (from cash advances or luxury debt) within 90 days prior to filing for bankruptcy.
Violations of bankruptcy court proceedings: The filer does not follow the rulers outlined in the bankruptcy code. This can include filing in the wrong jurisdiction, not filing the necessary paperwork promptly or accurately or not fulfilling the terms outlined in a Chapter 13 debt repayment plan.
Dismissal without Prejudice: The bankruptcy case is dismissed but the filer may request the court to review the case (after a specified time period) if the filer is able to resolve the issues in question. Some filers may have to wait a significant time before filing bankruptcy again.
Dismissal with Prejudice: Filers who do not act in good faith and misstate financial information about their assets, income or debts on bankruptcy forms may have their case dismissed with prejudice. If this occurs, the filer is not allowed to file a bankruptcy case in that bankruptcy court again.
More Help on Dismissal
- Automatic Stay - If a petition is filed under Chapter 7, Chapter 11 or Chapter 13 Bankruptcy Section 362(a) of the Bankruptcy Code, it initiates an automatic stay which is basically an injunction against creditors to cease any activities which advance the interest of the creditor against the debtor. - read more
- Bankruptcy Court - United States federal courts have jurisdiction over all bankruptcy cases and the cases are not allowed to be filed in state court. - read more
- Debtor - A debtor is an entity or person who owes a debt or a service to another person or entity which can also be called a Creditor. - read more
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