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Bankruptcy Dismissal VS Discharge

Since a lot of people don’t find themselves in a situation where they’ve to admit bankruptcy, many are ignorant about what bankruptcy actually entails. For that reason, many individuals aren’t familiar with the majority of terms utilized in the bankruptcy process.
This might be very frustrating for somebody who is thinking of declaring bankruptcy for the very first time. The two phrases you may hear whenever you choose to declare insolvency are “dismissal” and “discharge”. A lot of people think that the words may be used but that’s not correct.

Bankruptcy Dismissal – Definition

In order to declare bankruptcy there are particular requirements you need to meet. By way of example, the U.S. Bankruptcy Code requires all debtors to go through a credit counseling course within 180 days before submitting their petition.
Should they do no not adhere to this along with other requirements, it’ll result in the automatic dismissal of their bankruptcy case. Some other reasons why a bankruptcy case could be dismissed comprise:
  • Struggling to explain assets are missing.
  • Lying under oath.
  • destroying records or Not maintaining documents.
  • Attempting to defraud creditors by concealing or transferring property within one year of filing.
  • Maybe not meeting certain deadlines.
  • Struggling to make payments that are pan within time given for Chapter 13 case.
  • Maybe not attending the meeting of creditors.
  • Maybe not submitting the correct forms with the court.
Once your case is dismissed creditors may continue with their own debt collection efforts just as they did before you filed. That suggests that creditors are free to garnish your income or wages to get their money back.

Bankruptcy Discharge – Definition

A discharge in bankruptcy is when the court gives an order for the elimination of a debt. In this situation, you acquire the protection of the automatic stay, which protects you from all creditor collection actions. Put simply, you no longer have to pay the debt, and the creditors are not permitted to pursue you for debt. Which means creditors can’t do things like sending letters, phoning or suing you over debt once the debt is discharged. A Chapter 7 and Chapter 13 bankruptcy equally have discharges but a release if more limited for a Chapter 13 bankruptcy. Individuals who register for a Chapter 13 bankruptcy have to pay a part of the debt for some period of time before a discharge happens.

Debts That Cannot Be Discharged

In a Chapter Seven bankruptcy the following debts can’t be discharged:

  • Retirement plan loans.
  • The Debts you didn’t record whilst on your bankruptcy.
  • Debts you accrued due to a drunk driving conviction.
  • Child support, alimony along with other debts under a marriage settlement arrangement & taxes.
  • Debts that you discharged in a previous bankruptcy.

Dismissed Bankruptcy Chapter 13

Most the debts above can also not be discharged in a Chapter 13 Bankruptcy. Other loans you can’t discharge under a Chapter 13 Bankruptcy include student loans and debits incurred because of malicious actions. Consult a resourceful bankruptcy attorney if you want to know all the debt relief options presents for your case.