![]() For instance, in years past, debtors whose homes were going to be foreclosed would file bankruptcy to stop the foreclosure by the automatic stay that began as soon as the debtors filed the petition. This requirement to show cause is to dissuade debtors from using the bankruptcy process for other than what it was intended for. The right for the debtor to dismiss his own case is not absolute under Chapter 7 and 11, or under a chapter converted from 7 or 11, unless the debtor can show cause. These grounds fall into 3 broad categories: voluntary dismissal, dismissal for cause, and bad faith or abuse of process. Trustee and the certificate issued by the agency must be submitted with the petition otherwise the debtor's petition will be dismissed.Įach chapter of bankruptcy has a section stating the grounds for dismissal under that chapter: For instance, an individual debtor must have received credit counseling from an agency approved by the U.S. However, certain requirements must be met to obtain a dismissal - even the debtor does not have an absolute right to dismiss his own case in some circumstances.Ī major cause for dismissal under any chapter of bankruptcy is when the bankruptcy petition or the petitioner does not comply with the requirements mandated by law. Abstention is another alternative to dismissal, when the court refuses to take on a case because either it would be unfair or because it would be more appropriate to defer to another court.Ī dismissal of a bankruptcy case can be sought by the debtor, trustee, creditor, or other party in interest. ![]() One alternative is a conversion to another chapter of bankruptcy, which may be more appropriate for the circumstances, or because it is required by law. There are some remedies that provide an alternative to a dismissal of a case, and may be a better option. The debtor and his bankruptcy estate are released from bankruptcy, the automatic stay is ended, and the creditors are free to pursue their collection remedies outside of bankruptcy. The dismissal of a bankruptcy case ends it, including most of the legal consequences of the bankruptcy filing, but without giving the debtor a discharge of his debts. Instead, if there is something wrong with the petition, or if there is evidence of bad faith or abuse of process, or it is evident from the petition filed that bankruptcy would not be the best solution for the petitioner, the court can dismiss the case. However, without the information in the bankruptcy petition, it is not possible to screen petitioners to determine if bankruptcy is the proper remedy. ![]() Hence, most anyone can file for bankruptcy, whether it would be in their or their creditors' best interest or not. Most bankruptcy filings are voluntary, and the requirements are few and simple. Bankruptcy Dismissal › Money › Credit and Debt › Bankruptcy Bankruptcy Dismissal
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