Yes, your bankruptcy case can be dismissed. It doesn’t happen often, but it can happen.
Maybe your attorney missed a deadline. Maybe you didn’t show up at the meeting of creditors or provide the trustee with a copy of your tax return. Maybe the United States Trustee filed a motion to dismiss your Chapter 7 bankruptcy because you made too much money to qualify for Chapter 7. While focusing on the reason why can help you avoid mistakes in the future, the more important question is what happens next and how the dismissal affects you if you decide to file again.
Remember that when you file bankruptcy, a protective order is put in place. This protective order prevents creditors from taking any action to collect a debt from you. Foreclosures have to stop. Garnishments have to stop. Lawsuits (except divorces and criminal proceedings) have to stop. Once your case is dismissed, unfortunately, that protective order evaporates. Creditors – who you haven’t paid at least since you filed your case – will want their money. The phone calls will start again, lawsuits can be filed, and paychecks can be garnished. It also means that any property that the trustee has (a tax refund, for example) must be returned to you.
The good news is that you can file a new bankruptcy petition. Depending on why your case was dismissed you may have to wait 180 days before you re-file. And, generally, having your earlier case dismissed has no effect on your new case. Section 349 of the Bankruptcy Code states that, “the dismissal of a case under this title does not bar the discharge, in a later case under this title, of debts that were dischargeable in the case dismissed; nor does the dismissal of a case under this title prejudice the debtor with regard to the filing of a subsequent petition under this title.” However, if your case was dismissed for your failure to abide by an order of the court or if you asked the court to dismiss your case, you’ll want to wait 180 days from the dismissal date to re-file.
If you’re served with a motion to dismiss, you should contact your bankruptcy attorney immediately to talk about what the next steps should be. You can either fight the dismissal or prepare to re-file after the court enters its dismissal order. In either case, you should know what the consequences are.
If you have questions about bankruptcy, we hope you’ll schedule a free, no-obligation consultation. You can learn about whether bankruptcy is your best option and whether you want to work with us. Schedule your consultation online or call 303.331.3403 to meet with a bankruptcy lawyer today.