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Dismissals in Bankruptcy

Dismissals in Bankruptcy
"Numerous decisions must be made prior to and throughout the bankruptcy procedure. After filing for bankruptcy, one of the most important decisions a person must make is whether or not to continue. There are situations in which an individual may determine they no longer require bankruptcy protection.

Voluntary Dismissals

A case is dismissed voluntarily when the debtor requests that it be closed without any debt resolution. People may request the closure of their case for a variety of reasons, including:

Successfully negotiating directly with creditors
Obtaining sufficient employment to continue making debt payments
Obtaining a significant sum of money that can be used to directly resolve debts
Discovering that a particular debt does not qualify for bankruptcy discharge

In general, a voluntary termination can be beneficial. Ultimately, the ability to repay debts outside of bankruptcy can be advantageous for a person's credit and future loan prospects. If a person needed to petition again in the future, a court would view a voluntary dismissal much more favorably than an involuntary dismissal or even a discharge.

However, voluntary dismissals can be problematic, as removing the bankruptcy status from a credit report can be challenging at times. Once you file for bankruptcy, the credit bureaus promptly reflect your filing status, indicating that you have entered bankruptcy even before your debts are discharged. Before approval, removing the status could take several months and involve extensive communication between the court and creditors.

Involuntary Dismissals

Unwilling dismissal occurs when the court terminates the case without resolving the debt. Involuntary terminations typically result from:

Actions or suspicions of fraud during the procedure.
Non-payment of required expenses
Failure to fulfill essential requirements

Involuntary terminations can be problematic and cause future issues for a debtor. Not only will their debts not be discharged, but they may also be prevented from filing for bankruptcy in the future. Depending on the reason for dismissal, a person may be barred from refiling for 180 days or indefinitely. Additionally, it is very difficult to have them removed from a credit report. Even worse, the bankruptcy status as well as the continuous delinquency of their non-dismissed accounts will be reflected on the credit report.""

" - https://www.affordablecebu.com/
 

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"Dismissals in Bankruptcy" was written by Mary under the Finance / Wealth category. It has been read 114 times and generated 0 comments. The article was created on and updated on 01 June 2023.
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