The weight of financial debt can be too much for some people to bear. Filing for bankruptcy may be the best tool available to help you find relief from your crippling debt.
Bankruptcy allows you to clear your financial slate so that you can begin to rebuild your finances without fear.
It's important that you fully understand the possible outcomes you may experience when filing for bankruptcy so that you will be prepared to utilize a bankruptcy filing to your advantage in the future.
1. You Ask to Dismiss Your Filing
There are some cases where dismissing your own bankruptcy filing could make sense.
Self-dismissal is typically seen in Chapter 13 bankruptcy cases. After filing for a Chapter 13 bankruptcy, a debtor will work closely with the bankruptcy trustee to make routine payments toward their debt.
If you discover that the total amount you will be paying under a Chapter 13 bankruptcy exceeds what you would pay each of your creditors individually, you can petition the court to dismiss your bankruptcy filing.
2. The Court Dismisses Your Filing
The court maintains the right to review all bankruptcy petitions to determine if a consumer should be eligible to file for relief. By dismissing a petition, the court is essentially rejecting the filer's request for financial protection.
A court dismissal will typically only occur in a bankruptcy case where the statement of assets and debts is incomplete, or the debtor fails to make timely payments to the trustee.
If the court dismisses your filing without prejudice, you can immediately file again once you have gathered any missing information. Cases that are dismissed with prejudice cannot be refiled.
3. Your Bankruptcy Is Discharged
The ultimate goal for anyone who files a bankruptcy petition is to have their case discharged by the court. The discharge of your debts means that the court is essentially forgiving those debts.
If you filed a Chapter 7 bankruptcy petition, debt forgiveness happens immediately.
If you choose to file a Chapter 13 bankruptcy petition, you may have to wait until you have successfully made payments to the bankruptcy trustee for a period of three to five years. Any balance that remains on your debts will then be forgiven.
Bankruptcy can be a valuable tool in helping you regain your financial stability. Be sure that you understand all possible outcomes before filing your bankruptcy petition so that you will be prepared to navigate the bankruptcy process.
For more information, contact a local bankruptcy lawyer.