Bankruptcy Discharge and Dismissal: Do You Know the Difference?
Bankruptcy cases have two results: dismissal and discharge. While they sound similar, these two outcomes are extremely different. As a consumer filing for bankruptcy, it is your job to know and understand those differences.
What is a Dismissal?
Dismissal is a word you never want to hear in a bankruptcy case. If your bankruptcy case is “dismissed”, then this means that you are still obligated to pay debts owed to your creditors. This also means that the creditor can resume their collection tactics, including any legal methods they have at their disposal.
A dismissal can occur for a variety of reasons. One of the most common is when you default on your court-approved Chapter 13 payment plan. Other reasons can include falsifying information on your bankruptcy documents, misrepresenting your case in court, and so on.
You can avoid a dismissal by enlisting the help of a skilled bankruptcy attorney. An attorney ensures your forms are filled out properly, that you do not misrepresent your case, and helps negotiate with creditors to protect against dismissal.
Also, if you have a Chapter 13 payment plan in effect, do not miss a payment. If you cannot make your scheduled payment, contact your attorney right away. An attorney can help you avoid a default and hopefully, prevent a dismissal.
What is a Discharge?
Discharge is a good word in bankruptcy. It means that the debts listed in your bankruptcy have been discharged, meaning creditors can no longer collect on those debts and you are not obligated to pay them.
Once your bankruptcy case is finalized, you receive a discharge. This protects you from additional collection attempts and any debt collector that continues to collect after a discharge is violating state law.
A discharge does not relieve you from all debt obligations, such as alimony or child support. Most taxes are also not discharged and student loans are not discharged unless you qualified for undue hardship, which is extremely rare. Also, any new debts you establish after your bankruptcy you are required to pay as agreed with your creditor.
Hire an Attorney
If you are thinking about filing for bankruptcy, it is best to have an experienced bankruptcy attorney in Florida by your side. The Law Office of Kelley, Fulton & Kaplan can help you with your bankruptcy case. We handle everything from filing the paperwork to representing your case against creditors so that you can get a fresh start. Call now at 561-264-6850.