Knowing the difference between bankruptcy discharge and dismissal is important, because they mean very different things for you and your credit. One is good, while the other is bad. Today we're going to show you the difference, and what they mean to you.
Dismissal means the bankruptcy is canceled. A bankruptcy dismissal usually happens because the petition wasn't filed on time, or you didn't make your payments. It may also happen if the court suspects fraud because of problems in the paperwork, last minute credit charges, or trying to hide property. This can mean fines and jail time.
There are two types of dismissal: with prejudice and without prejudice. Without prejudice means you can re-file, and ask for protection under the automatic stay policy. With prejudice means you can't re-file for 180 days. You will want to talk to your lawyer about your options either way.
The court may dismiss the bankruptcy, the trustee may request it, or you may request it. When your bankruptcy is dismissed the automatic stay ends, and creditors may begin or continue to foreclose your property or garnish your wages. Unless you re-file, the dismissal will remain on your credit report for 7-10 years, but in most states creditors cannot pursue payments after 3-6 years.
Bankruptcy discharge means that all of your debts were paid as agreed if you filed Chapter 13 bankruptcy, or your debts were wiped out if you filed chapter 7 bankruptcy. You followed all of the rules and your bankruptcy is complete. This is the goal when you file bankruptcy.
When the bankruptcy is discharged, the creditors involved no longer have the right continue collection actions. If they do try collection actions you should contact your attorney right away. This includes any phone calls, letters, and personal contact from the creditors.
If you have completed your bankruptcy, and need a post-bankruptcy auto loan, BankruptcyAutoFinancing.com is here to help. We have lenders who can help you get a car loan quickly and easily. Soon you will be driving a new-to-you vehicle, and will be on the road to rebuilding your credit.
Remember, we are not lawyers and cannot give legal advice. The situations discussed are only our experiences over the years and may vary with each customer.