Dismissal of Bankruptcy

A dismissal of bankruptcy is a legal term in bankruptcy law that occurs when a bankruptcy court judge dismisses an ongoing bankruptcy for a variety of legal reasons. A district court bankruptcy judge is the only one who has the legal authority to dismiss a bankruptcy, and bankruptcy laws must be upheld in the dismissal process. Like most judicial processes, a dismissal of bankruptcy can be appealed and the case can be heard by a different panel of judges. A debtor can voluntarily have their case dismissed or it can be dismissed involuntarily. Normally, when a case has been dismissed, the bankruptcy is closed and not opened again with the same case number.

There are two types of dismissals in bankruptcy: a Dismissal with Prejudice and a Dismissal without Prejudice. If a bankruptcy judge has made an involuntary dismissal and determined the bankruptcy infractions were serious enough to declare a Dismissal with Prejudice, the debtor will never be able to file for bankruptcy protection again in bankruptcy court. If there is a Dismissal without Prejudice, whether the dismissal is voluntary or involuntary, the debtor will have to wait a certain length of time before filing for bankruptcy protection again.

The most common reasons for a dismissal of a bankruptcy are failure to disclose information about a debtor's assets, failing to accurately fill out formal court provided documents, not appearing at the 341 Meeting without good cause, abuse of any particular part of the process, bankruptcy fraud, lying under oath, not completing a reorganization or repayment plan on time, or violating the spirit of any of the bankruptcy laws.

In addition to a bankruptcy having been dismissed with prejudice, more serious violations of the bankruptcy laws, like bankruptcy fraud, can bring prosecution to a filing debtor resulting in fines and/or prison time.