Dismissing Chapter 7 bankruptcy involves your Chapter 7 liquidation case being thrown out of court. This can occur due to an action from you or from your creditors/trustees. Any attempt at a Chapter 7 bankruptcy will lead to a hearing, where any party can object to the dismissal.
The dismissal of a Chapter 7 bankruptcy can occur due to the following scenarios:
- Voluntary dismissal: If you choose to drop your Chapter 7 case, the Court will listen and attempt to grant what you require as long as it does not adversely affect the creditors' ability to collect the debts that are owed.
- Dismissal for failure to comply: The Court will dismiss your case if you make it hard for creditors to collect the debts that are owed, you don't pay the fees for a Chapter 7 bankruptcy, and/or you don't file all of the forms for a Chapter 7 bankruptcy.
- Dismissal for abusing Chapter 7 bankruptcy: If you filed Chapter 7 in bad faith, have ability to repay a significant portion of the debt (and should have filed Chapter 13 instead), and/or have lived and continue to live well beyond your means.
If your Chapter 7 bankruptcy case is dismissed, your creditors and trustees will have the ability to pursue your assets to pay the debts that you owe to them, as the automatic stay that came with your Chapter 7 bankruptcy case is revoked with the dismissal.Options You Have After Chapter 7 Bankruptcy Dismissal
You can re-file your Chapter 7 bankruptcy case after dismissal, but if you file within 1 year after the last dismissal, the automatic stay will only remain for a period of 30 days. This means that you must file a motion to extend the automatic stay immediately after re-filing the case; the judge will decide whether to accept or reject your motion for an extension.
However, you cannot re-file your Chapter 7 bankruptcy case if you've had a Chapter 7 or 13 case dismissed in the past 6 months due to any of the following reasons:
- Your previous bankruptcy case was dismissed because a creditor sought relief from automatic stay.
- You didn't obey a court order related to your case.
- Your previous bankruptcy filing was considered to be fraudulent.
A Chapter 7 bankruptcy case will negatively affect your credit for 7-10 years, with the negative effects diminishing as time passes.Attaining Legal Help
Knowing what to do after a Chapter 7 bankruptcy dismissal and doing it correctly is vitally important, yet quite complex. An experienced bankruptcy attorney can provide all of your legal options and the knowledge to select the best legal option for your particular case so that you can overcome the bankruptcy filing and proceed with your life as quickly and as painlessly as possible.