Dismissed or Discharged in Bankruptcy
By Cathy Moran, California Bankruptcy Lawyer on Apr 5, 2007 in Bankruptcy Practice and Procedure, General Bankruptcy Information
This pair of words is so often confused by the public: they are misused as though they are interchangeable. Let’s put each in its place.
Discharge refers to the order of the bankruptcy court that makes the debtor’s dischargeable debt forever unenforceable. Proper usage is that the debtor “receives a discharge” though if you tell a bankruptcy lawyer you were discharged (of your debts), they’ll understand.
Dismissed refers to the case filed by a debtor. It almost always refers to the termination of the case before a discharge is entered. The legal effect of a dismissal is that the debtor and his creditors are returned to their legal rights as they existed outside of bankruptcy.
The ‘05 amendments to the Bankruptcy Code added a number of duties of the debtor which, if unperformed, lead to dismissal of the case. The amendments also limited the scope of the automatic stay in cases filed subsequent to the dismissed case. As a result, it has become far more difficult to represent yourself in bankruptcy and get that prized discharge.
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