Discharge in bankruptcy is good. Dismissal is generally bad. Discharge is what most debtors seek when filing their bankruptcy. Dismissal is what a debtor is generally trying to avoid.
The discharge is the injunction granted by the bankruptcy court that keeps the creditors from enforcing their rights to collect personally on the debt. More commonly, people say the discharge wipes out the debt. Although that is not technically correct, it is what appears to happen to most debt.
Dismissal usually means something has gone wrong with the case. Dismissal most often happen in Chapter 13s but can happen in Chapter 7s. The debtor is no longer in bankruptcy and is no longer protected by the automatic stay. The debtor now still owes all of the creditors and is often is a worse position than when they first filed. When the debtor receives the notice of dismissal, they should get back in touch with their lawyer as soon as possible.
Remember that a discharge is what you are seeking. When you receive the notice of discharge, save it forever. If you get a dismissal, you need to get in touch with your lawyer.
Last week I got a call from a client from the late 1990s who want to know why her creditors were bothering her. I had to inform her she got dismissed from her Chapter 13 for not making her payments. No one had bothered her for years, but the debts were still out there because she had gotten dismissed. She thought the dismissal notice was her discharge.
DISCHARGE IS A GOOD THING IN BANKRUPTCY.
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