Many assume that a bankruptcy discharge and dismissal are the same thing, which is far from the truth. As such, if you are filing for bankruptcy, understanding how these two elements differ is critical to preparing for your case. The following blog explores what you should know, as well as the importance of working with an experienced Memphis, TN consumer bankruptcy lawyer to help you understand your rights during these difficult times.
Are a Bankruptcy Dismissal and Discharge the Same Thing?
While a dismissal and discharge may sound similar, it’s critical to understand that these are drastically different. Typically, the primary goal of bankruptcy is to receive a discharge. This means you have successfully completed the bankruptcy process, and the judge discharges your remaining eligible debts. A discharge means you are no longer legally obligated to repay these debts.
A dismissal, on the other hand, occurs when the judge assigned to your case stops the bankruptcy and closes your case without a discharge of debts. As such, this means you will remain liable for the debts you’ve accumulated. The automatic stay will also lift, meaning collectors may resume contacting you, including seizing your property, garnishing your wages, and even filing lawsuits against you. In short, this means your filing was unsuccessful.
Under What Circumstances Can a Case Be Dismissed?
Generally, a bankruptcy dismissal occurs because there is an issue in your case. Common grounds on which a case can be dismissed include, but are not limited to, the following:
- You failed to attend the required pre-filing credit counseling
- Your paperwork is missing or incorrect
- You did not pay the required filing fees
- You did not attend the required court hearings
- You fell behind on your Chapter 13 payments
- You did not adhere to court orders
- You failed to disclose all assets and income to the court
- You are ineligible for the chapter you’ve filed
You should also note that there are two forms of dismissal: with prejudice and without. Bankruptcy with prejudice often occurs because the court suspects you’ve intentionally attempted to defraud the court or you’ve violated the orders imposed by the court. If your case is dismissed with prejudice, it inhibits your ability to refile, as you’ll generally need to wait at least 180 days before attempting bankruptcy again.
If your case is dismissed without prejudice, it generally means there was a harmless procedural error with your case, like missing paperwork, or you did not complete the required pre-filing courses. There is no waiting period to re-file. Instead, you can file again as soon as you remedy the errors that caused your case to be dismissed.
As you can see, navigating bankruptcy can be incredibly difficult. That is why it is in your best interest to connect with an experienced attorney with the Arnold Law Firm to help guide you through these difficult times. We understand how difficult filing can be, which is why we can walk you through this process so you can reap the full benefits. Connect with us to learn more.
