Filing for bankruptcy relief doesn't guarantee a discharge—the order that wipes out qualifying debt. If you don't follow the bankruptcy laws or procedures in your jurisdiction, the court might dismiss your case. Luckily, most dismissals are without prejudice, and you can immediately refile your case.
Read on to learn what happens when the court dismisses a bankruptcy case without prejudice.
When the court dismisses a case without prejudice, you can file another bankruptcy matter right away instead of being required to wait. You can also discharge all qualifying debts in the next case. This type of dismissal usually occurs because of a procedural mistake, such as a failure to file the correct forms, not as a result of unethical behavior.
By contrast, a dismissal with prejudice will prevent you from filing another bankruptcy for a specific period, or forever prohibit you from discharging any of the debts existing at the time of your first filing. The court will dismiss a case with prejudice if you:
Learn more in What Happens If the Court Dismisses a Bankruptcy Case With Prejudice?
After filing your case, you must comply with the bankruptcy rules and procedures. The court dismisses most matters because of the failure of debtors to:
In bankruptcy, the automatic stay protects the filer from almost all creditor collection activities. It stops them in their tracks.
In most cases, the stay remains in place throughout the bankruptcy matter. However, if the court dismisses your case, your creditors can come after you to collect their debts once again. Mostly, you're in the same position you were in before filing.
Also, immediately filing another bankruptcy will limit your automatic stay in the new case. Here's how.
In either situation, you can file a motion to extend or impose the automatic stay in your new bankruptcy. You'll need to be prepared to explain to the court the need for multiple cases.
If the court dismissed your case without prejudice, it's reasonably clear that you ran into a problem in the previous matter. A bankruptcy attorney can help you fix the issue, as well as file a motion asking the court to grant or extend the automatic stay's protection against creditors.