What Is A Bankruptcy Dismissal?
After you file for bankruptcy, you can either get a discharge or a dismissal. These two terms are often confusing to many, and some even assume that the two terms mean the same thing. A bankruptcy dismissal is not the same as a bankruptcy discharge. When you file for bankruptcy, your goal is to get a bankruptcy discharge and not a bankruptcy dismissal. Simply put, a bankruptcy dismissal takes you back to the situation you were in before you filed for bankruptcy (that is, dealing with overwhelming debt and pressure from creditors), whereas a discharge offers you debt relief.
When your bankruptcy case is discharged, it means that you no longer have any personal responsibility for the debts included in the discharge. Generally, a discharge means that all the debts included in the bankruptcy discharge are forgiven, and you are free from those debts. Additionally, because a discharge means that your debts have been eliminated, creditors have no right to demand payment of any discharged debts.
When your bankruptcy case is dismissed, it means it is canceled. A bankruptcy dismissal ends a bankruptcy case before a discharge is entered. Generally, a dismissal occurs when an individual makes a mistake that warrants the cancelation of a bankruptcy case.
If the court dismisses your bankruptcy case before a discharge is entered, then you will lose the protection of the automatic stay. Once you lose this protection, creditors can proceed with pursuing you for payments. If creditors continue pursuing you, you might end up having to deal with unfortunate outcomes like wage attachment, bank account garnishment, and/or foreclosure.
Courts usually dismiss bankruptcy cases either with or without prejudice. Even though you should try avoiding any type of dismissal, you’d rather get a dismissal without prejudice than dismissal with prejudice.
Dismissal With Prejudice
Suppose the court dismisses your bankruptcy case with prejudice; in that case, your ability to refile your bankruptcy case might be significantly affected. If the court dismisses your bankruptcy case with prejudice, you might be unable to refile for bankruptcy relief for a long time. A dismissal with prejudice can prevent you from having otherwise qualifying debts wiped out.
Courts usually dismiss bankruptcy cases with prejudice for mistakes such as;
- Attempting to hide assets
- Bad faith filing
- Willful disobedience of the court or bankruptcy system
Dismissal Without Prejudice
When you make a procedural mistake during your bankruptcy case, a dismissal without prejudice is what you are most likely to get. For instance, if you did not file a particular form with the court or failed to pay court fees, your case might end up being discharged without prejudice. However, when your case is dismissed without prejudice, you can refile immediately after your dismissal. When you refile, you must ensure you correct the mistake that led to the bankruptcy dismissal.
It is crucial to note that you might not get adequate protection from the automatic stay when you refile a bankruptcy case after a dismissal. If you refile within twelve months of getting one bankruptcy dismissal, the automatic stay will most likely protect you for only 30 days unless you file an appropriate motion to extend it with the Court. In the event that you refile after receiving more than one dismissal in a single year, you might not get the protection of the automatic stay.
Contact Us for Legal Help
Whether your bankruptcy case has been dismissed with prejudice or without prejudice, it is crucial you reach out to a qualified bankruptcy attorney who can help you appeal the dismissal or refile your bankruptcy case. Contact a skilled Lehighton & Carbon County bankruptcy attorney today to get expert assistance.