The ideal goal when filing for bankruptcy protection is to resolve your debts. There are a lot of different ways that you can achieve this ⁠— including Chapters 7, 11, and 13. For each of the different types of bankruptcy, debt can be eliminated when certain criteria are met or under certain conditions. A bankruptcy lawyer can explain the differences between the types of bankruptcy for you to choose which suits you best.

However, there are a few possible outcomes that can result from the proceedings regardless of what type of bankruptcy you file. Two of those outcomes include “discharge” and “dismissal”. Although discharge and dismissal are similar-sounding words, anyone filing for bankruptcy protection needs to understand that these two hold vital differences.

Discharge vs. Dismissal

When you enter into bankruptcy, the goal of the filing is generally to discharge your debt. It means you no longer have to repay your debt and it is no longer collectible by the company or entity to whom it was owed.

For example, eligible unsecured debts such as credit card bills are discharged at the end of the bankruptcy when you filed for Chapter 7 protection. Creditors cannot collect the debt listed on your credit report and you are no longer obligated to pay any of those discharged debts. Although the process is different, Chapters 11 and 13 can also result in the discharge of some debts.

A dismissal, on the other hand, does not mean that any debts are wiped clean. It means that the bankruptcy case is dismissed by the judge and will not continue to go forward. Thus, creditors can continue collecting the money that you owe or owed on your debts from you.

When does a dismissal occur?

Dismissal is something that you do not want to associate your case with as it will leave your financial problems unresolved. A dismissal can occur when something has gone wrong such as failure to follow through with the required obligations of your bankruptcy proceedings or if the judge believes that you are not eligible for bankruptcy, perhaps because you just filed recently.

Avoiding a dismissal should be a top priority for those who want to go through bankruptcy proceedings. A bankruptcy lawyer can help you with your bankruptcy case so you will be able to avoid this undesirable outcome and instead end up with an eliminated debt.

Leave a Reply

Your email address will not be published.