If you want to complete your bankruptcy successfully and discharge (eliminate) your debts, you must comply with all bankruptcy laws and follow all required procedures. If you fail to satisfy all substantive and procedural requirements, the court might dismiss your case without a discharge of your debts. Read on to learn more about the most common reasons the court might dismiss your bankruptcy.
For more information on how the bankruptcy process works, see our Bankruptcy Procedures topic.
Reasons the Court Might Dismiss Your Bankruptcy Case
In most cases, the court will dismiss your case if you intentionally abuse the bankruptcy process or fail to follow procedural requirements. The following are some of the most common reasons the court might dismiss your bankruptcy.
You Abused the Bankruptcy Process or Committed Fraud
Most debtors file for bankruptcy to resolve or reorganize their debts and receive a fresh financial start. But some debtors abuse the bankruptcy process by hiding assets, disobeying court orders, and filing for bankruptcy solely to delay or hinder their creditors.
If you lie on your bankruptcy paperwork, fail to obey court orders, or otherwise abuse the bankruptcy process, the court will dismiss your case. In addition, intentionally abusing the system or committing fraud will typically result in denial of your discharge, dismissal of your case with prejudice (meaning you may not be able to file again for a period of time or discharge certain debts in the future), and even criminal prosecution.
To learn more about what happens if your case is dismissed with prejudice, see What Does Dismissed With Prejudice Mean in Bankruptcy?
You Don’t Qualify for the Type of Bankruptcy You Filed
Both Chapter 7 and Chapter 13 bankruptcy have certain eligibility requirements. To qualify for Chapter 7 bankruptcy, your disposable income must be low enough to pass the bankruptcy means test. If you want to file for Chapter 13 bankruptcy, your debts can’t exceed certain predetermined dollar limits. If you fail to meet all eligibility requirements, the court will dismiss your bankruptcy.
You Didn’t Complete the Credit Counseling or Debtor Education Course
Before you can file for bankruptcy, you must complete a mandatory credit counseling course with an approved agency. This is a simple class that you can complete online or over the phone. When you file your case, you must file your certificate of completion with the court. If you fail to take the credit counseling course prior to filing your case, the court will dismiss your case.
In addition, you must complete a second class called a debtor education (or personal financial management) course after you file your case. If you fail to complete the debtor education course, the court will close your case without a discharge of your debts.
To learn more about these requirements, see our topic area on Credit Counseling and Debtor Education in Bankruptcy.
You Didn’t Pay the Court Filing Fees
Filing for Chapter 7 or Chapter 13 bankruptcy is not free. When you file your case, you must pay the court a filing fee to administer your bankruptcy. If you file for Chapter 7 bankruptcy and have little or no income, you may be able to qualify for a fee waiver. But unless the court waives your filing fee, it will dismiss your case if you don’t pay it.
You Didn’t File the Necessary Forms or Provide the Required Supporting Documents
When you file for bankruptcy, you must complete numerous forms including a bankruptcy petition, schedules, statement of financial affairs, and other documents. In addition, you must submit certain supporting documents to your bankruptcy trustee prior to your meeting of creditors to verify the information in your paperwork. If you fail to file any of the required documents, the court will typically dismiss your case.
For detailed information about the types of forms required in bankruptcy, see our topic area on Completing the Bankruptcy Forms.
You Didn’t Attend Your Meeting of Creditors
Before you can complete your bankruptcy and receive a discharge, you must go to a mandatory hearing called the meeting of creditors (also called the 341 hearing). The 341 hearing is designed to allow the bankruptcy trustee and your creditors to ask you questions regarding your bankruptcy paperwork and financial affairs. If you don’t appear at your meeting of creditors, the court will usually dismiss your case.
To learn more about what happens at the 341 hearing, see our topic area on The Meeting of Creditors.
You Didn’t Make Your Monthly Chapter 13 Plan Payments
Chapter 13 bankruptcy can allow you to catch up on your missed mortgage or car loan payments, pay off nondischargeable priority obligations (such as alimony, child support, and certain taxes), and reorganize your debts through a repayment plan. But you must make monthly payments to your bankruptcy trustee in accordance with the terms of your plan. If you fail to make your plan payments, the trustee will ask the court to dismiss your bankruptcy.
For more information how Chapter 13 plans work, see our Chapter 13 Repayment Plan topic.