Filing a Chapter 7 or Chapter 13 bankruptcy case doesn’t always mean you'll make it to the finish. Along the way, the court could dismiss your case for various reasons. Find out when and why a court might dismiss your bankruptcy case, and what will happen if your case gets dismissed.

Dismissal Because You Don’t Meet Eligibility Requirements

If your case doesn’t fit within the legal parameters of the bankruptcy chapter you’re filing, the court will have no choice but to dismiss your case or convert your case to a different type of bankruptcy.

Here are some examples of when that might happen:

• You’ve filed a second bankruptcy case too soon.
• You’ve failed the Chapter 7 means test but you don’t want to file for Chapter 13.
• Your debts exceed the Chapter 13 debt limits.
• The court won’t confirm (approve of) your Chapter 13 plan.

Keep in mind that these issues can be avoided by consulting with a bankruptcy lawyer.

Dismissal Because You Don’t Comply With Bankruptcy Requirements

Most filers’ bankruptcy cases get dismissed because of a failure to follow bankruptcy requirements for filing, producing documents, or other administrative matters. Some of the most common reasons for these types of dismissal are:

• Not completing the pre- or post-bankruptcy credit counseling class. You must complete an approved credit counseling class within the 180 days before your bankruptcy filing. While there are a few exceptions to this requirement, they rarely apply. If you don’t file a certificate with the court stating that you took this class, the court will dismiss your case. You’ll also have to complete a debtor education course after you file your case. Again, if you don’t submit your certificate of completion in a timely manner, the court will dismiss your case.
• Failing to file all of the required bankruptcy forms. You must complete and file a packet of forms with the bankruptcy court. While you can file a “skeleton” bankruptcy petition to get the ball rolling, if you don’t file the remaining forms within 14 days, the court will dismiss your case.
• Failing to pay the court filing fee. You must pay a filing fee when you file your matter. If you can’t afford the fee, you can apply for a fee waiver or for an installment plan to pay the fee over time (both of those options require court approval). If you don’t pay the fee, or if you miss an installment payment, the court will dismiss your case.
• Not providing requested documents after filing the bankruptcy forms. Once your case is underway, you’ll have to provide the bankruptcy trustee with financial documents. For instance, you’ll supply the trustee with your most recent tax return one week before your meeting of creditors. The trustee will ask for other documents as well, such as financial statements, pay stubs, and mortgage statements, to help verify the information supplied in your bankruptcy petition. If the trustee’s request is reasonable, and you don’t cooperate, you risk case dismissal. (Find out what the trustee looks for in bank statements.)
• Failing to appear at the meeting of creditors. In both Chapter 7 and Chapter 13 bankruptcy, you must attend a hearing in front of the bankruptcy trustee called the meeting of creditors. If you don’t show up, you’ll likely get one more chance, and then after that your case will be dismissed.
• Not making your Chapter 13 plan payments. If you are in Chapter 13 bankruptcy, you’ll have to make payments to the bankruptcy trustee for three to five years. If you get behind and don’t make alternative arrangements to catch up, the court will dismiss your case.

Dismissal Due to Fraud

When you file for bankruptcy, you’re expected to share every aspect of your financial situation in a transparent manner. Not only must you disclose all of your income, assets, debts, and recent financial transactions to the court, but you’ll verify having done so by signing your paperwork under penalty of perjury.

You’ll want to avoid committing bankruptcy fraud at all costs because it comes with severe consequences. If you hide something from the court, lie on your petition or in a bankruptcy hearing, or otherwise commit fraud, the court will dismiss your case. You might also face fines, a ban on future bankruptcy filings, and even jail time.

What Happens After the Court Dismisses Your Case?

If the court dismisses your case because you failed to comply with the various bankruptcy requirements, usually you can file for bankruptcy again right away. However, if the court dismissed your matter due to fraud, you’ll likely be barred from discharging that debt in the future. You might also be precluded from filing a bankruptcy case for a certain period. The order dismissing your bankruptcy will list the conditions.

Questions for Your Attorney

• What happens if I make an innocent mistake, such as forgetting to list a debt, when filing for bankruptcy?
• Where can I find an approved credit counseling class in my area?
• If I decide not to continue with my bankruptcy, can I dismiss the case myself?