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What Is Bankruptcy Dismissal?

Bankruptcy dismissal is an action by the court to dismiss a bankruptcy case. This means the case has been officially closed by the judge and no further rulings are made. In short, the bankruptcy will not be finalized.

There are various reasons that a judge dismisses a bankruptcy case. There may be errors committed by the petitioner, violations of court rules or misstatements in the petition filed before the court. An example of non-compliance to bankruptcy rules is when a petitioner is found to be not a resident of the court’s jurisdiction. Other instances that can compel the court to dismiss the case are when the petitioner fails to provide the required documents such as tax returns and bank statements and if timely payments are not made in accordance with Chapter 13 of the bankruptcy agreement.

When the case is dismissed, the debts of the petitioner remain and they can no longer recover the filing fees. As such, creditors can again to take action against the person who owed them money. They may continue collecting the amount due them through the so-called collection calls or they can file a lawsuit against the petitioner to recover their fees.

A bankruptcy petition is normally filed voluntary and the documents required to be submitted are few. When the court finds that the petitioner has not followed certain rules or failed to accomplish certain documents, the bankruptcy case can be dismissed. As this happens, the automatic stay ends and the creditors are free to pursue other remedies they see fit.

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