Debtors filing for bankruptcy must follow court rules and attend hearings or risk having their case dismissed. If you receive a notice of dismissal, it means the court will no longer consider your case. Dismissal of a bankruptcy case may limit your ability to file another bankruptcy case in the future.
A debtor may file a petition for voluntary dismissal after filing for bankruptcy. Debtors typically seek voluntary dismissal if they find debt they cannot discharge in bankruptcy, receive enough money to pay their debts, or simply feel the process is too stressful. The courts have discretion over whether to grant the dismissal, but a debtor with no assets is more likely to have her petition for dismissal granted.
Dismissal for Failure to Pay Filing Fee
If you file for bankruptcy, you must pay a filing fee. The law allows you to pay the entire fee at once, or in installments. A bankruptcy judge may dismiss your case if you fail to pay the filing fee at all, or miss an installment payment. Before dismissing the case, the court must send notice or hold a hearing to give you the opportunity to correct your error or apply for a waiver if you cannot afford the fee.
Dismissal for Failure to Timely File Required Forms
Chapter 7 and Chapter 13 bankruptcies have official forms and documents you must file with the bankruptcy court to support your case. These forms include lists of your creditors, real and personal property, creditor holdings, income and expenditures, as well as documentation such as pay stubs and tax returns. Notification to the debtor and the trustee is required. If you fail to file the required information by the court's deadline, the judge may dismiss your case.
Dismissal for Abuse
To qualify for bankruptcy under Chapter 7, you must meet certain income requirements. The court uses a means test to compare your average household income for the past six months to the state median income for households of similar size. If your average income is below that median threshold, you automatically qualify. If your income exceeds the median, the court also looks at national averages and actual expenses before making its determination. If you fail the means test, the judge may either dismiss the case as abusive or convert it to a bankruptcy under Chapter 11 or Chapter 13 with your consent.
Other Reasons for Dismissal
Bankruptcy cases may also be dismissed because you failed to attend required creditors' meetings or failed to fulfill credit counseling requirements. If you have a prior bankruptcy case that was dismissed or is still pending, this may result in dismissal of a new case. Additionally, if you already concluded a bankruptcy that discharged some debts, that case may bar you from filing another bankruptcy. If you commit fraud against your creditors or the bankruptcy court, your case may also be dismissed.
Motions to Dismiss by Trustees and Creditors
Creditors and trustees may file motions to dismiss a debtor’s case. Often, these motions arise because you failed to comply with procedural rules. For example, creditors or the trustee may file a motion to dismiss if you fail to provide income tax returns at least seven days before a creditors' meeting, or if you don't file a current income tax return.
- United States Bankruptcy Court: Dismiss or Convert a Bankruptcy Case, Can the Debtor Voluntarily do this?
- United States Bankruptcy Court: Dismiss or Convert a Bankruptcy Case, Can the Court do this Without the Debtor's Consent?
- Cornell University Law School Legal Information Institute: Federal Rules of Bankruptcy Procedure -- Section 1017
- Nolo: Reasons the Trustee or Court Might Dismiss Your Bankrutpcy Case
- Photo Credit JacobStudio/iStock/Getty Images
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