Bankruptcy Basics: What Does It Mean When Your Case Is Dismissed, Not Discharged?

by Karen Oakes, Esq.

August 25, 2007

The end of a bankruptcy case can happen two ways: dismissal or discharge. When a case, whether 7 or 13 ends in a discharge, this means that the discharged debts are uncollectible by a creditor. The discharges gives the debtor a fresh start financially.

On the other hand, a dismissal is usually a bad thing, depending on perspective. A dismissal means that the case is dismissed, the debts survive and there is no fresh start for the debtor. Various reasons cause a dismissal. The Court (or Judge) may dismiss the case if required paperwork is not filed on time. The Court may dismiss the case if the debtor failed to get the required credit counseling before filing. The Court may dismiss a Chapter 13 case if the judge does not believe that the plan of reoganization (the Chapter 13 Plan) is going to work. An attorney may voluntarily dismiss a Chapter 13 case (the Chapter 7 Trustee will usually object to a voluntary dismissal of a Chapter 7 case) if the debtor loses a job, financial status changes for some reason, or some other strategic reason. Dismissal is usually not a good thing and attorneys try to avoid it, especially after the amendments to the bankruptcy code of 2005. It is important to complete all paperwork with the help of your attorney and to keep in touch with your attorney in case there are important deadlines that might result in a dismissal of your case.

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I'm a consumer protection lawyer in Oregon, working with people in Klamath; Lake; Jackson; Josephine; Curry; and Deschutes County. I speak regularly on bankruptcy and consumer protection issues nationwide.

Last modified: August 25, 2007