When you file for bankruptcy protection, the ideal goal is to resolve your debts. There are a lot of different ways that you can do that, including Chapter 7, Chapter 11 and Chapter 13. For each of these different types of bankruptcy, debt can be eliminated when certain criteria are met or under certain conditions. A Pasadena bankruptcy lawyer can explain to you the differences in the different types of bankruptcy so you can choose the one that makes the most sense.
No matter what type of bankruptcy you file, however, there are a few possible outcomes that can result from the bankruptcy proceedings. Two of those outcomes include discharge and dismissal. While discharge and dismissal may be similar sounding words, there are very fundamental differences between these two endings to a bankruptcy and anyone filing needs to understand those differences.
Discharge vs. Dismissal
When you enter into bankruptcy, the goal of the filing is generally to discharge debt. This means that the debt is forgiven or wiped clean and is no longer collectable by the company or entity to whom the debt was owed.
When you file for chapter 7 protection, for example, eligible unsecured debts such as credit card debt are discharged at the end of the bankruptcy. Creditors cannot collect, the debts are listed on your credit report as discharged and you are no longer obligated to pay any of those discharged debts. Chapter 11 and chapter 13 can also result in discharge of some debts, although the process is different.
A dismissal, on the other hand, does not mean that any debts are wiped clean. Instead, a dismissal means that the bankruptcy case is dismissed by the judge and does not continue to go forward. Money that you owe or owed on your debts is not forgiven or discharged and creditors can still continue trying to collect the money from you.
When Does a Dismissal Occur?
A dismissal is usually something that you do not want to have happen during your bankruptcy since it will leave your financial problems unresolved. A dismissal can occur when something goes wrong, such as a failure to follow through with the required obligations of your bankruptcy proceedings. A dismissal can also occur if the judge believes you are not eligible for bankruptcy, perhaps because you already filed recently.
Avoiding a dismissal should be a top priority for those who want to go through with bankruptcy proceedings. A Pasadena bankruptcy attorney can help you with your bankruptcy case so you will be able to avoid this undesirable outcome and instead end up with a discharge of your debts.