How long after chapter 7 is dismissed can creditors start collecting?

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Question:

How long after chapter 7 is dismissed can creditors start collecting?

Answer:

Getting a chapter 7 bankruptcy dismissed is a major blow. What drives it home even more is the fact that creditors can start collection activities the moment they find out.

Reversing the Dismissal

Provided the dismissal was due to a simple error, such as a schedule being left out, the case is dismissed without prejudice. This means that the case can be reopened, which tends to be less expensive than refiling altogether. However, reopening the case requires that it go in front of a judge, who then decides if it should be allowed. Most of the time the judge will agree and the case can move forward once again.

It's not the end of the world if the judge does not reopen the case. There may have been too many errors in the petition and the judge does not want to see it move forward. For this situation, a new petition will have to be filed with the problems corrected. The automatic stay will go back into effect once the new case number is issued.

Unfortunately, during all of this, the automatic stay is lifted. Creditors can go back to their collection activities that were curtailed during the first filing.

Hire a Lawyer as a Hedge Against Dismissal

Utilize the skills of a bankruptcy lawyer for filing a bankruptcy. Their knowledge of how to fill out the petition will keep errors from getting the case dismissed. And not only that, it's just a good idea to hire one due to the overall complexities of filing. Many a pro se filer has been tripped up because of their lack of knowledge.

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