Bankruptcy Dismissed vs discharged? Know these important terms!
Bankruptcy can be an extremely overwhelming process. You need to understand the different terms used in bankruptcy law and what they mean for you before going ahead with this decision. Hearing about “dismissal” or “discharge” from someone who has filed their own may give some insight into one’s future course of action if they were ever faced with such circumstances themselves!
Every individual filing bankruptcy is motivated to obtain an order from the bankruptcy court “discharging” any debts incurred before their case. A bankruptcy discharge has legal consequences that prevent creditors from suing or attempting collection of these past-due balances, giving you a fresh start with opportunities in life once more!
Bankruptcy dismissals are never good news. A bankruptcy dismissal means that your case has been halted prematurely without a discharge being granted, which can make it challenging to get back on track with your debts.
Talk to an experienced bankruptcy attorney to make sure you receive the discharge you deserve. Our bankruptcy attorneys can file the bankruptcy case you need!
Table of contents
- Bankruptcy Dismissed vs discharged? Know these important terms!
- What is a bankruptcy dismissal?
- What is a Bankruptcy Dismissal Without Prejudice?
- What is a Voluntary Dismissal?
- Creditor Response to a bankruptcy dismissal? Resuming collection activities…
- Can I File Another Bankruptcy Case after a dismissal?
- What is a bankruptcy discharge?
- What are the requirements of a bankruptcy discharge order?
- A final option is Closed Without a Discharge
- Contact a Michigan Bankruptcy Attorney for more information!

What is a bankruptcy dismissal?
You don’t want your bankruptcy case to be referred to as a “dismissal.” It implies there was an error in the filing. If the Bankruptcy Court orders your case to be dismissed, it closes without discharging or eliminating your debts.
It is frustrating to have a case dismissed, especially when you spent the money and time for it. When bankruptcy is dismissed, it is like you never filed. You do not want a bankruptcy dismissal.
The automatic stay also ends when a case is dismissed. Unfortunately, this implies that collectors may renew attempts to collect money from you, including lawsuits, wage garnishments, foreclosure proceedings, and asset seizures.
Why does the Court enter a Bankruptcy Dismissal?
If the Debtor doesn’t meet the requirements of their bankruptcy case, the Court will enter a bankruptcy dismissal order.
The following can be considered grounds for a bankruptcy dismissal:
- Fill out all of the necessary paperwork and forms.
- Pay the filing fees associated with your case.
- Make sure you complete the required credit counseling and financial management courses.
- Attend the 341 debtor’s exam or creditors’ meeting.
- Fail to provide any requested financial information to the bankruptcy trustee.
Do not mislead or engage in bankruptcy fraud!
Willfully misleading or concealing information on your bankruptcy is a felony. In addition, you must provide accurate financial information, which includes all of your income, assets, liabilities, and other required financial details. If you file misleading bankruptcy schedules at a minimum, your case will be dismissed.
In most cases, you can oppose the trustee’s motion to dismiss, including the one you were terminated with prejudice. You must submit the necessary or correct paperwork and fulfill all of the requirements. At this point, a bankruptcy judge will decide if your case is dismissed.
Dismissals in Chapter 13 vs. Chapter 7
A Chapter 7 bankruptcy is usually completed in as few as 90 days, but a Chapter 13 bankruptcy might take months or years. A Chapter 13 bankruptcy also costs more than a Chapter 7 bankruptcy. Because of this, before receiving a discharge, a Chapter 13 bankruptcy case is more likely to be dismissed.
Chapter 13 bankruptcy requires plan payments that must be made for several years. Accordingly, the most common reason a Chapter 13 case is dismissed is that the Debtor failed to make these required payments.

What is a Bankruptcy Dismissal Without Prejudice?
Usually, a bankruptcy dismissal filed in a bankruptcy case is ordered “without prejudice” unless otherwise stated. Without prejudice means that the person will be able to file a new bankruptcy petition.
If a bankruptcy dismissal is worded “with prejudice,” it usually indicates that the Bankruptcy Court will not allow the case to be reinstated or reopened. Unfortunately, this can also prevent a new case from being filed.
Time Bar on Refiling Bankruptcy Cases
Furthermore, most dismissals with prejudice will keep you from reapplying for a set period of time. Depending on the circumstances, this time bar maybe 90 days to one year in length.
What is a Voluntary Dismissal?
In the rare event that you wish to dismiss your bankruptcy case, you must obtain permission from the Bankruptcy Court. The type of bankruptcy you have filed and why you are requesting the voluntary dismissal will affect whether or not your request for termination is approved.
Requesting a Voluntary Dismissal of your Bankruptcy Chapter 7 filing
The majority of courts will not allow you to terminate or dismiss a Chapter 7 bankruptcy case on your own. This is especially true if you’re doing it to avoid having to give up nonexempt property. If you file your petition and the trustee moves to seize nonexempt assets, you will unlikely be able to secure a voluntary dismissal of your bankruptcy petition.
A voluntary bankruptcy dismissal is highly unlikely in these situations. Bankruptcy fraud is vey serious and has very harsh consequences that do beyond the dismissal of your bankruptcy filing. It can result in a permanent ban on filing the debts you owe at the time of of filing. It can also can involve possible jail time and fines.
Requesting a Voluntary Dismissal of your Chapter 13 bankruptcy filing
A Chapter 13 bankruptcy case will almost always be dismissed if the Debtor files a motion to dismiss. In a Chapter 13 the Debtor files for bankruptcy protection and enters a payment plan to pay a portion f their debts. Because of this the Debtor has an absolute right to request a Chapter 13 dismissal.
A bar may be attached to the termination, preventing you from filing bankruptcy again for a set period of time if you are doing so to avoid surrendering an asset or turning over cash to the Bankruptcy Court.

Creditor Response to a bankruptcy dismissal? Resuming collection activities…
The automatic stay takes effect the moment the bankruptcy petition is filed. The automatic stay stops creditors from taking legal action against you. However, if a creditor wants to collect, it must do so in bankruptcy court.
Creditors have the power to pursue a variety of collection procedures, such as foreclosures, repossessions, and actions, after completing the dismissal of the bankruptcy case.
Can I File Another Bankruptcy Case after a dismissal?
You may file a new bankruptcy case as long as your existing one was dismissed without prejudice. This implies that you can start a new case at any time, with no statute of limitations applying to it.
If your bankruptcy petition was dismissed with prejudice, you might not be able to file a new bankruptcy case.
For example, if your bankruptcy case was dismissed with prejudice because there was either an apparent attempt to cover up or hide your assets, your case was filed in bad faith, or there was determined to be abuse of the bankruptcy code, you may be prevented from filing another bankruptcy case. This can for a certain period of time or forever barred from discharging any of the debts existing at the time of your first filing.
What is a bankruptcy discharge?
A bankruptcy discharge removes the Debtor from responsibility for some categories of debt. In legal terms, the Debtor is no longer obliged to pay any debts that are discharged. When you file bankruptcy you want the protection of the automatic stay to keep your property and get out of debt. The discharge is the final step in the bankruptcy process.
The bankruptcy discharge is a permanent ban on creditors from taking any form of collection action on discharged debts, including legal action and conversations with the Debtor, such as phone calls, letters, and state court collection remedies.
A valid lien that has not been avoided in the bankruptcy case will remain after bankruptcy, even though a debtor is not personally liable for discharged debts. As a result, a secured creditor may enforce the lien to recover the assets covered by it. This is often the case with car loans and mortgages.
It is important to keep a copy of your discharge in case you have any creditors trying to collect on a debt that was discharged in your case.
What are the requirements of a bankruptcy discharge order?
A chapter of the bankruptcy code has its regulations of being discharged. For example, in Chapter 7, the Debtor must file complete and precise schedules, participate in a creditors meeting and complete a course in fiscal management. If creditors do not meet these conditions, the Bankruptcy Court will not discharge them the case will be dismissed and closed.
In chapter 13 cases, the Debtor is usually entitled to a discharge once all payments under the plan have been completed. However, if the Debtor does not take a required personal financial management class in chapter 13, the release may not occur.

A final option is Closed Without a Discharge
A bankruptcy case may be closed without a discharge in the event of several different outcomes. A case closed without discharge is not dismissed, and it is not discharged. It can happen in several ordinary circumstances.
Chapter 13 cases that follow closely after the Debtor receives a Chapter 7 discharge will not be discharged. In these cases, after the plan payments are completed, the case will be closed.
Cases are also closed without a discharge when the Debtor fails to complete the required debtor financial education class. The financial education certificate must be filed in every person, consumer bankruptcy case. If it is not, it will result in the case being closed without a discharge.
Contact a Michigan Bankruptcy Attorney for more information!
A bankruptcy lawyer can help you through your debt issues. First, get the legal advice you need. Every person’s case is different. You want an attorney that is experienced in the local bankruptcy court for the area you reside.
Bruce law Firm has bankruptcy attorneys that can help. Our bankruptcy attorneys offer a free consultation. If you need to file bankruptcy call today.