Chapter 7 Dismissal

• Chapter 7 bankruptcies provide a debtor with a way to completely discharge many debts, and the court may liquidate non-exempt assets to return some money to creditors included in the bankruptcy. If you file Chapter 7 bankruptcy, you do not have the guaranteed right to voluntarily dismiss your bankruptcy. The court has to specifically rule whether you have the grounds to ask for a bankruptcy dismissal. The creditors also have the right to reject the petition to dismiss the bankruptcy, as they now have a vested interest in your assets and the bankruptcy case.
  
  

Chapter 13 Dismissal

• A Chapter 13 bankruptcy does not discharge debt, but instead puts it in a single payment plan to partially or fully repay all creditors. A Chapter 13 bankruptcy filer may choose to dismiss the bankruptcy case at any time, and this type of bankruptcy may always be voluntarily dismissed. The creditors are not allowed to object to the bankruptcy, and the filer simply needs to have the court sign the order.
  
  

Effects

• A dismissal may have a greater negative effect on your credit score than the bankruptcy itself. You still take a large credit hit for having the bankruptcy and dismissal on your record. In addition to that, none of the credit accounts are included in a bankruptcy, so any late payments or balances on those accounts affect your credit once again. Finally, you have no protection under the automatic bankruptcy stay, so creditors may send your accounts to collections or sue you for the balances.
  
  

Involuntary Dismissal

• A bankruptcy may be dismissed by the court as well. If the filer or his lawyer does not properly file the bankruptcy petition, the filer does not show up to all required court meetings or the filer does not submit the proper financial paperwork, the case can be dismissed. If the filer attempts to commit bankruptcy fraud by hiding or lying about assets, the bankruptcy may be dismissed with prejudice. If the case is dismissed in this fashion, the debtor is unable to include those accounts in another bankruptcy filing.