My Bankruptcy Was Dismissed. What Happens Now?

What Happens if Your Bankruptcy Case Is Dismissed?

If your bankruptcy is dismissed, it means the court has closed your case without eliminating your debts. 

This can happen for several reasons. Some of the most common reasons include:

• Failing to submit required documents

• Failing to pay the court filing fee

• Missing court deadlines

• Not following through with obligations like attending the 341 meeting of creditors

• Not completing a required repayment plan in Chapter 13 bankruptcy

If your case is dismissed, you may be able to fix the issue and refile. But if you get multiple dismissals within a short period, you may not be protected by the automatic stay. This is important because the stay stops all collections actions, including debt lawsuits and wage garnishment.

Understanding why dismissals happen and how to avoid them can help you keep your bankruptcy case on track.

Discharge vs. Dismissal

Chapter 7 bankruptcy is an effective way to get relief from overwhelming debt. The majority of people who file Chapter 7 get a financial fresh start through a bankruptcy discharge.

A dismissal is different from a discharge. A bankruptcy discharge means your eligible debts have been erased, and you are no longer legally required to pay them. A dismissal, on the other hand, leaves you responsible for all your debts as if you had never filed for bankruptcy at all.

How To Avoid Bankruptcy Dismissal

Filing for bankruptcy comes with a few important responsibilities. If you miss a required step, the court may dismiss your case, which can delay the relief you're seeking.

Whether you file Chapter 7 or Chapter 13, to keep your case on track, you must:

• Complete your bankruptcy petition and schedules accurately and honestly

• Pay the filing fee or request a waiver if you qualify

• Be transparent with the bankruptcy court and trustee about your finances

• Complete two mandatory educational courses: a credit counseling course before filing and a financial management course after filing

• Attend your 341 meeting of creditors and any other required court hearings

If you file for Chapter 13 bankruptcy, you must also:

• Submit and follow an approved repayment plan*

• Make all plan payments on time

• Meet any additional plan obligations, such as selling assets if required

Failing to meet these responsibilities can lead to case dismissal, often at the request of the bankruptcy trustee. By staying organized and following through with all requirements, you can increase the chances of getting a successful bankruptcy discharge rather than a dismissal.

*Pro Tip: Chapter 13 cases are much more complex than Chapter 7 cases, in part due to the required 3–5-year repayment plan. If you plan to file Chapter 7, Upsolve offers a free filing tool for eligible individuals. If you plan to file Chapter 13, it’s best to get legal advice from an experienced bankruptcy attorney. Most pro se Chapter 13 cases fail. Upsolve can set you up with a free consultation with a local attorney.

When and Why a Trustee Might Request Dismissal

The bankruptcy trustee plays a key role in overseeing your case and making sure that you follow bankruptcy law. If they find that you haven’t done everything you’re supposed to do, they can ask the court to dismiss your case.

For Chapter 7 filers, trustees most often request dismissal if:

• You miss your 341 meeting of creditors

• You fail to submit the required bankruptcy forms or financial documents

• You don’t comply with court orders or trustee instructions

For Chapter 13 filers, dismissal requests are more common because the process lasts 3–5 years. Trustees may ask the court to dismiss your case if:

• You fail to propose or follow a repayment plan

• You miss scheduled monthly payments

• You don’t meet other plan requirements, such as selling a required asset

If a trustee has requested a dismissal, you may have options. If the request is based on incorrect information, you can present evidence to counter it. If you're struggling with Chapter 13 payments, you may be able to modify your plan. The sooner you address the issue, the better your chances of keeping your bankruptcy case active.

Voluntary Dismissals: When Would You Want To Dismiss Your Own Case?

Most people want to avoid having their bankruptcy case dismissed, but in some situations, you might actually want to dismiss your own case.

Here are a few reasons you may  withdraw your bankruptcy case before it’s completed:

• Your financial situation changes. If you received an inheritance, a new job, or a loan modification that makes your mortgage more affordable, you may no longer need bankruptcy.

• You need to refile to include new debts. If you filed bankruptcy and then took on significant new debt, you might want to dismiss your case and start over so you can include those debts.

• You filed Chapter 13 but can no longer keep up with your repayment plan. Instead of struggling with payments you can’t afford, you may want to dismiss your case and explore other options, like filing Chapter 7.

The voluntary dismissal process varies based on the type of bankruptcy you file. Also, keep in mind that you need to get the court’s approval.

How To Request a Voluntary Dismissal

If you decide you need to dismiss your bankruptcy case, you’ll need to file a Motion for Voluntary Dismissal with the court. This is a formal request explaining why you want your case dismissed.

If you’re in a Chapter 13 bankruptcy case, the court will usually approve your request unless there's evidence of fraud or abuse.

If you’re in Chapter 7, you’ll need to show a good reason for your request, and the court may still deny it.

One big risk of voluntary dismissal is that if the court denies your request, you may be barred from refiling for a certain period of time — anywhere from 180 days to several years, depending on the circumstances. 

If you're thinking about dismissing your case, it's a good idea to consult a bankruptcy attorney to make sure it’s the right move.

What Are the Consequences of a Bankruptcy Dismissal?

If you have more than three dismissals in a one-year period, you won’t benefit from an automatic stay for a new case. This is true whether the dismissals were voluntary or involuntary. 

That means that you won’t receive protection from the automatic stay, which prevents foreclosures, collections activity, repossessions, wage garnishments, and calls from credit card servicers, lenders, or debt collectors. 

Also, bankruptcy filings appear on your credit report, which means the filing itself may impact your credit score. Bankruptcy filers who get their unsecured debts, such as credit card debt, discharged can work to rebuild their credit. This may be more difficult to do if your case is dismissed and your credit score has already taken a hit from missing payments or having debts sent to collections.

Let’s Summarize…

If you want to benefit from a bankruptcy discharge, you must meet all obligations under the law. These obligations don’t differ much between Chapter 7 and Chapter 13 bankruptcy, but Chapter 13 does require filers to also complete a payment plan. Failure to meet all obligations can result in a bankruptcy dismissal. Multiple dismissals result in you losing the protection of the automatic stay should you ever need to file again.

If you have a simple Chapter 7 case, you may qualify to use Upsolve’s free filing tool to file your case without a bankruptcy attorney. If you have questions about a case dismissal, you can also schedule a free consultation with a bankruptcy lawyer.