Bankruptcy Defined

• Bankruptcy is a legal process in which an individual declares that they can no longer pay their debts. Individuals can file two types of bankruptcy: Chapter 7 or Chapter 13.
  
  

Discharged Bankruptcy

• A bankruptcy that has been discharged has met all the standards set by the court. Once a case is discharged, creditors can no longer try to collect on the debts owed to them.
  
  

Dismissed Bankruptcy

• A dismissed bankruptcy means that due to an error, the case has been dismissed, meaning the bankruptcy was not approved. Creditors can collect on the debts owed to them, and any stays for foreclosure or wage garnishments are still in force.
  
  

Reasons for Dismissal

• A bankruptcy case can be dismissed for several reasons, including having the wrong type of bankruptcy filed, increased income or the petitioners no longer qualify for their original choice for bankruptcy. Other reasons include not completing a required credit counseling class, the certificate was not filed with the court or all required wage and creditor information was not filed.
  
  

Ways to Avoid a Dismissal

• Follow the directions of the court to the letter. Retain a qualified bankruptcy attorney to help navigate through the bankruptcy process. File all requested materials on time. A late filing can cause a bankruptcy case to be dismissed.