Dismissals in Bankruptcy Court for Failure to File a Document

United States courthouse

Filing for bankruptcy does not guarantee that the case will be approved and a discharge granted. Bankruptcy cases are dismissed for a variety of reasons including failing to disclose all sources of income and assets or because of recent spending activities. It is also possible to have a bankruptcy case dismissed for failing to provide the court with necessary documents.

History

The Bankruptcy Act of 2005 was established to prevent individuals from abusing the bankruptcy system. Under the new bankruptcy rules, petitioners are required to complete a detailed filing process providing the court with all documents needed to verify the claims of the debtors' petition. Local bankruptcy courts are no longer able to make exceptions for individual petitioners who forget to submit a required document. Small documentation oversights will result in the dismissal of an otherwise complete petition for bankruptcy relief.

Notice

The bankruptcy courts trustee is responsible for notifying the petitioner, the petitioner's legal representation (if applicable) and the creditors listed on the bankruptcy petition. Notices are sent via United States postal mail and will include the reason for dismissal. Dismissals in bankruptcy courts for failing to file a document will give the exact name of the document that was not filed with the court.

Effects

Bankruptcy case dismissals completely close the case ending all court proceedings. This brings all court protection, such as automatic stays for creditors, to an end. Debt collection activities including foreclosure, repossession, and collection calls will resume once creditors receive copies of the notice of dismissal from the court. Creditors may choose to escalate debt collection activities by filing lawsuits in the hope of having debts partially repaid while the debtor is unable to avoid creditors.

Solution

Petitioners faced with a notice to dismiss for forgetting a document have a limited period of time to act. The bankruptcy rules give petitioner's 10 days to appeal the dismissal with the bankruptcy court. Filing a notice of appeal is the fastest way to have a bankruptcy case reinstated when dismissal is based on a lack of documentation. After the notice of appeal is filed a designation of records and statement of issues must be filed that addresses the reason for appeal and provides copies of the document that was previously forgotten.

Warning

Filing a notice of appeal and being granted a hearing to have the bankruptcy case considered for reinstatement does not protect a petitioner from collection activities. To stop resumed collection activities a motion for a stay on appeal must be filed and copies sent to all creditors. This motion will grant protection until the appeal hearing is completed.

References

• U.S. Courts Bankruptcy Rules
• Bankruptcy Dismissal