When you first make that appointment with your bankruptcy lawyer, you will have one primary goal: to get your biggest debts discharged by the bankruptcy courts. However, this does not always go according to plan. For example, you may discover that one of your biggest debts is not dischargeable, or that your job salary is enough to significantly reduce your debts over the next few years. Then there are other bankruptcy cases that are dismissed due to the failure of meeting basic court requirements.
So what exactly happens with bankruptcy dismissal - and how can you re-instate a bankruptcy case that was originally dismissed?
Here's what you need to know about the ins and outs of bankruptcy dismissal:
Voluntary Bankruptcy Dismissal
Voluntary bankruptcy dismissals occur when the individual that is filing decides that they no longer want to go through with the bankruptcy.
This usually occurs for several reasons; however, the most popular are the following:
- The individual discovered that their employment will actually provide them with enough money to pay off the debts over a shorter period of time than filing for bankruptcy; or
- The individual has discovered that their biggest debt isn't dischargeable under state and federal laws. This is typically the case with individuals who cannot pay off their student loans, tax debts, and other non-exempt debts.
If you've filed for a Chapter 13 bankruptcy , you can file for a voluntary dismissal at any time. However, if you've filed for a Chapter 7 bankruptcy , it's up to the bankruptcy courts to determine if your case can be dismissed.
Involuntary Bankruptcy Dismissal
Involuntary bankruptcy dismissal occurs when the debtor has failed to meet a requirement of the bankruptcy courts. This can result from something as simple as not fulfilling the paperwork requirements, or something as major as committing bankruptcy fraud. Your bankruptcy case can also be dismissed if you failed to complete credit counseling classes.
Can You Re-Instate a Dismissed Bankruptcy Case?
As soon as you have your bankruptcy case dismissed, immediately contact your bankruptcy lawyer to explore your re-instatement options. Time is of the essence here, so the faster you can contest the dismissal, the more likely it is that you'll have your case re-instated.
Whether the dismissal was involuntary or voluntary, you'll want the advice of a knowledgeable and experienced bankruptcy attorney to help you deal with the aftermath of your bankruptcy dismissal.