Why would a bankruptcy court dismiss my case with prejudice?

Learn why a bankruptcy court may prohibit you from refiling your case.

If you lie on your bankruptcy papers or try to abuse the bankruptcy system, the court can dismiss your case with prejudice. Read on to learn more about what it means to have your bankruptcy dismissed with prejudice.

What Does Dismissal With Prejudice Mean?

When a bankruptcy case is dismissed with prejudice, it can prohibit you from filing another bankruptcy for a specific amount of time or forever bar you from discharging debts existing at the time of the dismissed case. If your bankruptcy gets dismissed with prejudice, the court’s order will typically reflect the details of the dismissal in your particular case.

The majority of bankruptcy dismissals are without prejudice because they are a result of procedural deficiencies such as failure to file the proper forms or attend the meeting of creditors. However, in cases where the debtor hides assets, misrepresents information, or otherwise tries to abuse the bankruptcy system, the case may be dismissed with prejudice. (To learn more about the consequences of dismissal with prejudice, see What Happens If Your Bankruptcy Is Dismissed With Prejudice?)

Reasons Why a Bankruptcy Case May Be Dismissed With Prejudice

Bankruptcy law provides a 180-day bar to refiling a bankruptcy if the prior case was dismissed because the debtor willfully failed to obey court orders or voluntarily dismissed the bankruptcy after a creditor filed a motion for relief from the stay.

However, the court can also dismiss your bankruptcy with prejudice if it was filed in bad faith. Examples of bad faith bankruptcy filings include hiding assets, lying on your bankruptcy paperwork, filing for bankruptcy solely to delay creditors, and generally trying to abuse the bankruptcy process.

Bankruptcy judges can exercise broad discretion when dealing with bad faith bankruptcy filings. If the judge has cause, he or she can even order that any debts that could have been discharged in the dismissed case will be nondischargeable in future bankruptcies. (For more information, see Bad Faith Filing in Bankruptcy Cases.)

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