Most people believe that once they meet the eligibility requirements and file the paperwork, nothing can interfere with a chapter 7 bankruptcy. Unfortunately, nothing guarantees that all bankruptcies proceed as planned.
It serves your interests to learn about the reasons bankruptcy courts dismiss cases. The knowledge you gain can help you avoid losing out on the benefits a chapter 7 bankruptcy offers.
Discharge vs. dismissal
The words discharge and dismissal are alike enough to confuse those researching bankruptcy, but they mean different things. In this context, a chapter 7 discharge means you are no longer on the hook for the debts addressed in your filing documents. On the other hand, dismissal in the bankruptcy context means that the court has thrown out your case for some reason.
Common reasons for a dismissal
A leading cause of chapter 7 and 13 bankruptcy dismissals is incomplete or incorrect documentation.
Other reasons to know about:
- Failure to pay bankruptcy filing fees
- Failure to attend the mandatory meeting with creditors
- Failure to provide supporting documentation when requested
- Failure to disclose required financial information (assets, income, etc.)
- Failure to complete mandatory credit counseling and debtor education courses
A bankruptcy dismissal means you will no longer enjoy the benefits that come after you file your paperwork. For example, your creditors can once more engage in in their attempts to collect on the debt you owe.
The good news is that you can prevent issues like those above from disrupting your chapter 7 bankruptcy. Start by familiarizing yourself with what is required to complete the process under Alabama bankruptcy laws. A legal guide is an excellent source of knowledge about consumer bankruptcy.