What Is A Bankruptcy Case Dismissal Without Prejudice?

When you file for Chapter 7 or Chapter 13  bankruptcy, you must meet certain requirements to complete your case and get a discharge. If you are not able to comply with all the necessary requirements or steps, the bankruptcy court can dismiss your case with or without prejudice. If the reason for non-compliance is due to procedural lapses, the bankruptcy case is usually dismissed without prejudice.

It is therefore of primary importance to consult a bankruptcy lawyer in Seattle as soon as you see yourself filing for bankruptcy.  In this way,  you will be guided at the onset on the steps you need to take as well as the documents required of you.  This will lessen the risk of your bankruptcy being dismissed, whether with or without prejudice.

A bankruptcy dismissal is understandably frustrating. However, looking at the brighter side of things, a dismissal without prejudice is much better than one with prejudice. If the court dismisses your bankruptcy without prejudice,  you can immediately file another bankruptcy case (as long as you are otherwise eligible). However, you need to make sure that you rectify the mistakes you committed in your original filing so that the second filing of your bankruptcy case will stand a greater chance of success. You must also make sure to keep creditors from taking any action against you by filing a motion to extend or impose the automatic stay in your new case.

A bankruptcy dismissed with prejudice is much more frustrating and has grave consequences. 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. Grounds for bankruptcy dismissal with prejudice are:

  • Trying to hide or cover up assets
  • Filing your case in bad faith, or
  • Abusing the bankruptcy system

Luckily, unless you abuse the bankruptcy process or willfully disobey court orders, most bankruptcy dismissals are without prejudice.

Correctly filing a bankruptcy case is very important and complex.  Hence, it is imperative to use an experienced bankruptcy lawyer in Seattle to help you file. Otherwise, your bankruptcy case will be dismissed and/or delayed.

Why are Bankruptcy Cases Dismissed Without Prejudice?

In most cases, if you make a procedural mistake (but without any intention to abuse the bankruptcy system), the court will dismiss your bankruptcy without prejudice. Except in rare circumstances, the court will usually dismiss your case without prejudice due to the following:

  • Failure to complete the mandatory credit counseling sessions before filing your case
  • Failure to meet all eligibility requirements for the type of bankruptcy you wish to file
  • Failure to file a required form with the court
  • Failure to provide all necessary paperwork to the bankruptcy trustee
  • Failure to attend a mandatory court hearing such as the meeting of creditors or the Chapter 13 bankruptcy confirmation hearing
  • Failure to pay the court fees
  • Failure to make your Chapter 13 plan payments, or
  • Failure to follow any of the procedures.

How can I be protected from creditors if my bankruptcy case has been dismissed?

When you file for bankruptcy, you will get an automatic stay to prevent your creditors from collecting their loans or garnishing your money. However, bankruptcy laws impose certain limits on the automatic stay if you file multiple bankruptcy cases.  When you file for a second bankruptcy within a period of time, then that automatic stay is limited to 30 days. After the 30 days, the creditors may begin to collect again unless you petition to the court to continue the automatic stay. The purpose of this limited automatic stay is to prevent debtors from bad faith bankruptcy filings such as filing for bankruptcy simply to delay or hinder their creditors.

It is possible to get the court to put the stay in place. If you have a good reason for the new filing—or why the previous filings occurred—then you can file a motion with the court asking for the automatic stay. The court will grant your motion if you prove that you filed the case in good faith.

Contact a Seattle-Tacoma Bankruptcy Attorney

It helps to work with an experienced bankruptcy attorney in Seattle – Tacoma to ensure that your bankruptcy case proceeds without a hitch.  Your Seattle – Tacoma bankruptcy lawyer will make sure all required paperwork are taken care of, that you are updated of your court schedules, and that you comply with all the requirements set by the bankruptcy court.  Do not take the risk of DIY-ing your bankruptcy filing.  Your financial future is at stake.  Let our bankruptcy lawyers at Northwest Debt Relief Law Firm help you.  Call us for a free initial case evaluation.

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