by: Baran Bulkat, Attorney
Simply filing for bankruptcy relief does not guarantee that you will receive a discharge. If you fail to comply with bankruptcy laws or follow the proper procedures in your jurisdiction, your case may be dismissed. Luckily, most dismissals due to procedural reasons are without prejudice (meaning you can immediately refile your case). Read on to learn more about what happens if your bankruptcy is dismissed without prejudice.
When you are in bankruptcy, the automatic stay protects you from almost all creditor collection activities. If you successfully complete your case and obtain a discharge, you are no longer on the hook for any debts discharged in your bankruptcy.
However, if your case gets dismissed, you lose the protection of the automatic stay and your creditors are free to come after you to collect their debts. Essentially, when your bankruptcy is dismissed, you are in the same position you were in prior to filing.
After you file your case, there are certain procedures you must follow to complete your bankruptcy and obtain a discharge. In general, most bankruptcy cases are dismissed because of the debtor’s failure to:
When a case is dismissed without prejudice, it means that you can file another bankruptcy right away. If your bankruptcy is dismissed because of procedural reasons (such as failure to file the correct forms), it will typically be without prejudice.
In contrast, if you try to hide assets, file your case in bad faith, or otherwise abuse the bankruptcy system, your case may be dismissed with prejudice. If your case is dismissed with prejudice, you can be barred from filing another bankruptcy for a specific period of time or forever prohibited from discharging any of the debts existing at the time of your first filing.
To learn more about dismissals with prejudice, see What Happens If Your Bankruptcy Is Dismissed With Prejudice?
Even if your case is dismissed without prejudice, immediately filing another bankruptcy can limit your automatic stay in the subsequent case. If you refile your case within one year after it is dismissed, the automatic stay in the new case will be limited to 30 days. If you had two or more bankruptcies dismissed within one year prior to filing your new case, there will be no automatic stay in effect.
In that case, you will need to file a motion to extend or impose the automatic stay in your new bankruptcy and explain to the court your reasons for filing multiple cases.