What Happens If My Chapter 7 Bankruptcy Case Is Dismissed?

There are a number of very good articles on the Bankruptcy Law Network that discuss, to some extent or another, dismissal of a bankruptcy case.

For example,in “Do I Need A Lawyer To File Bankruptcy?” Däna Wilkinson discusses
dismissal as one of the pitfalls of representing yourself, and In “What Are
My Responsibilities After My Bankruptcy Case Is Filed?” Jonathan Ginsberg
points out the need to  take an active role in your bankruptcy in order to
minimize the risks of a dismissal.

So, you ask: “What’s the big deal about a dismissal?  I’ve heard that if my
bankruptcy is dismissed, I can just file again!”

While it is true that generally speaking, you can refile for bankruptcy, the 2005 amendments to the Bankruptcy Code created a potential to seriously limit what is the main advantage of a bankruptcy to a debtor who is refiling for bankruptcy:  The Automatic Stay!

What is an Automatic Stay?  The Bankruptcy Law Network Glossary of Important Bankruptcy Terms defines an Automatic Stay as:  “… an Order [by the Bankruptcy Court] that immediately stays, or stops, all collection actions against you. This means that
foreclosures, garnishments, attachments, lawsuits, collection calls and letters,and even regular monthly bills are stopped.”

Under the 2005 amendments to the Bankruptcy Code the automatic stay is limited if a debtor refiles a Chapter 7 case within one year of the dismissal of his previous bankruptcy.  For this debtor, the automatic stay now terminates thirty days after the bankruptcy petition is filed, unless the debtor can show that the new bankruptcy was filed in good faith.

Good faith is not defined by the amendments.  (However, in a later article I will discuss some of the standards set forth elsewhere as to when someone is in good faith or bad faith).

So how do you avoid having your case dismissed?  The easiest way is to use the services of an experience consumer bankruptcy attorney.

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