After filing for bankruptcy, a debtor may receive either a discharge or a dismissal. A bankruptcy discharge means the court has cleared the debtor and the debts owed to the creditors have been satisfied. A bankruptcy dismissal refers to the rejection of the bankruptcy petition, where the debtor is not cleared of their debts and the case is closed. There are a few reasons why a debtor may have their bankruptcy case dismissed.
If the debtor provides false information when filing the bankruptcy petition the case will be dismissed. The main reason a debtor provides false information is in effort to hide assets to avoid them being subject to liquidation.
Failure to comply with bankruptcy requirements
There are numerous papers that need to be completed and filed with the court in order for the bankruptcy proceeding to complete. If the debtor has not filed all of the necessary paperwork, the court may dismiss the case. Bankruptcy laws require debtors to complete a credit counseling course before their case can be discharged. Failure to complete the course and provide the certificate of completion to the court can lead to the case being dismissed. In Chapter 13 bankruptcy, the debtor must complete a repayment plan to be presented to the court for approval. The case may be dismissed if the debtor does not complete the Chapter 13 repayment plan.
Failure to meet eligibility for bankruptcy
The bankruptcy laws have put forth criteria to determine if a debtor qualifies for bankruptcy. The debtor must pass a means test to evaluate the extent of their financial hardship. The debtor must not have filed for bankruptcy within a certain amount of time. There is no limit to how many times you file bankruptcy. However, you can only receive a limited amount of debt discharges in a specified time period. Chapter 7 bankruptcy discharges can be received once in every 8 years. A Chapter 13 discharge can be received every 2 years. Once you receive a discharge notice and your case is dismissed, you can file again if needed.