Reasons For Bankruptcy Dismissal And Their Types

Reasons For Bankruptcy Dismissal And Their Types

Reasons for Bankruptcy Dismissal

The only reason why people file for Chapter 7 or 13 bankruptcies is the fact that they need a descent financial relief and opportunity to have a new start. In this case the majority of your debts can be liquidated or reorganized. It will depend on the type of bankruptcy that you choose. At the same time you should always be ready for bankruptcy dismissal.

Chapter 7 or Chapter 13 dismissal can take place due to several reasons. At the same time we should not that such dismissal can be also of two types: involuntary and voluntary. You are recommended to get acquainted with both types in order to evaluate future perspective of dealing with debts as well as perspectives of your bankruptcy case.

What Does It Mean If Bankruptcy Dismissed?

If you have ever been in the court, you already know that not all legal cases end up with judgment. The same thing is with dismissal. It ends the case before the judgment is decided by legal issuers. In other words the situation between you and creditors will be restored to that moment when you decided to file for bankruptcy.

Pay attention to the fact that you case can be dismissed apart from type of bankruptcy that you file for. On the other hand Chapter 13 dismissal can be different from Chapter 7 dismissal. Type of bankruptcy plays very important role.

Difference Between Involuntary and Voluntary Dismissal

Involuntary Dismissal

If we speak of Chapter 13 bankruptcy dismissed cases, we shout pint at several major reasons which can lead to such situation:

  • if you failed in completing necessary credit counseling;
  • if you provided misleading and dishonest information while applying for a credit;
  • if you did not pay filing fee:
  • if you missed a meeting with your creditors:
  • if you failed to make all necessary payments for your plan issued according to Chapter 13:
  • if hearing or notice call for involuntary dismissal.

Voluntary Dismissal

At the same time you always have an opportunity to initiate case dismissal on your own. This may happen if you find out that filing bankruptcy was not the best way out in your particular case. Here are the main reasons for voluntary dismissal:

  • you thinks that filing was not a good idea at all;
  • you have discovered additional assets which can cover debt;
  • you are not eager to include inherited and other types of property in the list of your bankruptcy estate;
  • you have found out that debts discharge is not possible in your situation;
  • you are not able to fulfill Chapter 13 repayment plan.

After your case was dismissed, you still have a chance to file for bankruptcy in the majority of cases, unless dismissal resulted in serious mistake.