The definition of a bankruptcy discharge is a simple one. Discharge refers to the debt that gets wiped out when you file a bankruptcy case. When you receive your discharge it will prohibit creditors from collecting on any qualifying debts once your case concludes.
People sometimes confuse this term with bankruptcy dismissal, which is something completely different.
A bankruptcy dismissal is basically what happens if you do not want to follow through with your case or cannot meet the requirements. The court can then dismiss your case without giving you a discharge.
Bankruptcy dismissals can be broken down into two categories: Voluntary and involuntary.
A voluntary dismissal is when you request the court dismiss your case. It will depend greatly on the chapter which you filed under.
A Chapter 7 bankruptcy case is difficult to dismiss, so much so that once started you should be prepared to have to follow it through. This is because the court will often only dismiss the case if it is not in the best interest of your creditors.
Just because you do not want to go through with it, or find out it might hurt you more than help you rarely factors in. Under Chapter 7 it will be the creditors interests that hold priority.
But if you are filing for bankruptcy under Chapter 13, you will have an easier time getting a dismissal should you so choose. In some jurisdictions all you have to do is file a motion that the judge can grant. In others, you can just notify the court that you no long wish to go through with the case. Typically, the court cannot keep you in a Chapter 13 bankruptcy case against your will.
Unfortunately, you will face a few difficult consequences if you decide to dismiss a Chapter 13 bankruptcy. A lender can file a motion asking the court to lift the automatic stay, which gets put in place as you file for bankruptcy. If the court grants the motion, the stay gets lifted and the creditor can pursue repossession or payment.
Now, an involuntary dismissal can occur if you do not do everything you are required to do when trying to qualify to get your debts discharged through filing for bankruptcy. This includes being honest and cooperating with the bankruptcy trustee. Failing to do so could result in your case being dismissed.
Other events that could prompt the involuntary dismissal of your case include:
Not filing bankruptcy schedules and other forms on time
Not submitting tax returns or 521 documents
Not passing the means test
Failing to pay the court filing fee
Not making all Chapter 13 plan payments
Failing to file a certificate showing you completed credit and debt counseling
Being incomplete and/or dishonest with your information on your paperwork
Not attending the 341 meeting of creditors
Failing to stay up to date on child support or alimony during the case
Trying to file multiple cases within a short period of time
You do have the ability to counter a bankruptcy trustee’s motion for dismissal by correcting paperwork or completing required documents. Basically, you would have to provide whatever it was you did not do the first time around.
After your case gets dismissed, involuntary or not, you have the power to refile again shortly after. This is only possible if your case was dismissed without prejudice, meaning there was no restriction put on how long you have to wait before you are able to file a new case.
On the other hand, if you case gets dismissed with prejudice, you will typically have to wait somewhere between 90 days and a year to file a new case.
In any situation, it is pertinent that you hire an experience bankruptcy lawyer before you choose to file for bankruptcy or back out of one. The Law Office of Joel R. Spivack has plenty of experience handling all types of bankruptcy cases and will keep your best interests at heart.
Call today for a free initial consultation at 856-488-1200.
The articles on this blog are for informative purposes only and are no substitute for legal advice or an attorney/client relationship. If you are seeking legal advice, please contact our law firm directly.