Bankruptcy Attorney Serving Twin Cities
While it is not something that happens often, it is possible for your Chapter 7 bankruptcy case to be dismissed by the court. What a bankruptcy dismissal means is that you do not qualify for the bankruptcy process and thus the filing is dropped. While this sounds particularly scary, if bankruptcy is your last option, it is unlikely to happen to you. Yet, it is best to understand why it might happen and what your options are. Usually a chapter 7 bankruptcy is dismissed if the client didn’t tell the lawyer that they owned something valuable, like a car, house or business. Walker & Walker works with you to make sure we have everything. In my experience, most people have nothing to hide because bankruptcy laws are actually quite generous on what you can keep in bankruptcy.
Why a Chapter 7 Bankruptcy is Dismissed?
There are only a handful of reasons a chapter 7 bankruptcy will be dismissed by the court. However, what it usually boils down to is that the client didn’t go to the hearing, finish the financial management course, or didn’t tell the attorney about a valuable asset or stream of income.. Most commonly, you will see dismissed cases because the client didn’t to the financial management course or go to the hearing. Walker & Walker prides itself on helping people get through the hearing without trouble, and we also have great follow up to make sure that the financial management course gets done and the certificate gets filed. Good communication with clients is key to this sort of thing. Walker & Walker has a discount code for the financial management course so that it only costs $15. Lots of law firms charge more for this.
In some dismissed cases, those involved may have lied about their assets in the bankruptcy petition in order to attempt to keep them. Yet, some cases of “fraud” are more innocent such as forgetting to file the proper forms, which doesn’t happen with proper legal representation, or failure to pay the filing fee. Both of which will result in the case getting dismissed.
Alternatively, your Chapter 7 bankruptcy case may be dismissed because you have too much income to qualify for it. In many cases, it means your Chapter 7 bankruptcy will be converted to a Chapter 13 bankruptcy instead which has different criteria and typically will cover those that have the means to repay their debt. In order to be converted, the Chapter 7 case will first need to be dismissed so you can refile..0
Chapter 7 bankruptcy can fix frivolous spending that went out of control and lead to a lot of debt, but it is not meant to solve debt that comes from living luxuriously. If your family has a high income, then Chapter 13 is typically more appropriate to get that debt under control. However, some will try to take advantage of Chapter 7 as it has no repayment plan to it. The courts typically frowns on this willful potential abuse of the system. Check out our qualifying for Chapter 7 bankruptcy page for more information.
Your Chapter 7 Case was Dismissed, What Next?
So your Chapter 7 bankruptcy was dismissed, now what do you do? How and why it was dismissed will usually provide some guidance. If you had the case dismissed because you do not qualify, typically then you can refile after converting it to Chapter 13 bankruptcy. If your case was dismissed due to a lack of payment or an error, you can still refile later. However, if you tried to defraud the system, you will be barred from refilling.
There are many advantages and disadvantages of filing for bankruptcy. It is important to remember two important things when your Chapter 7 bankruptcy is dropped. First is that you lose the protection of your automatic stay. This means your creditors are free to collect from you. If you are in foreclosure or having your car repossessed, these will continue once they are notified that you no longer have an automatic stay. The processes of collection like foreclosure do not start over either, they pick up right where the bank left off.
The second important thing to know after your bankruptcy case is dismissed is that it will still show up on your credit report for 7 to 10 years. So if you are thinking to start the process for any reasons, such as to get an automatic stay, it is a bad move. Even the act of initial filing will show up as filing bankruptcy on your credit, even if it is dismissed.
Need Help? Contact Our Office Today
The best way not to get you Chapter 7 bankruptcy case dismissed is to go at it with a knowledgeable bankruptcy attorney. If you need to file bankruptcy and want it done right, contact us today to see how Walker & Walker can help. We make sure filing is done on time and correctly so you don’t need to figure it out yourself.
