When filing for bankruptcy there are two possible outcomes to a case: discharge or dismissal. While the ultimate goal for any filer is to obtain a debt discharge, there are numerous factors that can ultimately influence the outcome of your case. In the event of a case dismissal, there are two ways this can happen.
A voluntary dismissal is when the debtor makes a formal request to terminate the bankruptcy process and deal with their debts on their own. People request for their case to be dismissed for a variety of reasons. Securing a debt repayment plan directly with a creditor is one reason why a debtor may request for their case to be dismissed. Other reasons include finding out a debt is not dischargeable through Chapter 13 bankruptcy, obtaining adequate employment or income to repay the debts outside of bankruptcy. While a voluntary dismissal may prevent a bankruptcy filing from being listed on the credit report, there is no guarantee. It can take several months and lots of communication between the court and creditors before the approval to have the bankruptcy status removed from a credit report is granted.
An involuntary dismissal occurs when the court terminates the bankruptcy case and no debt resolution is granted to the debtor. This generally occurs when the court determines that a debtor does not qualify for bankruptcy protection or finds that the debtor has not completed the necessary steps of the process. Actual or suspicions of bankruptcy fraud can lead to an involuntary dismissal. Failure to pay the court fees, complete the credit counseling requirement or comply with the court orders and rules may also lead to a case being dismissed. The main trouble behind an involuntary dismissal is that it can delay the process entirely or prohibit the debtor from re-filing their case for a period of time.