Dismissal of Bankruptcy
Definition - What does Dismissal of Bankruptcy mean?
A bankruptcy case can be dismissed in a variety of circumstances. Potential reasons for dismissal can differ based on the type of bankruptcy (such as Chapter 7 or Chapter 13) filed by the debtor(s). Determining the type of dismissal of bankruptcy can instruct a debtor on how to proceed with their bankruptcy case.
Justipedia explains Dismissal of Bankruptcy
In Chapter 7 bankruptcy cases, dismissal is rare and generally occurs when a debtor has not complied with the duties under the bankruptcy code. This can include not filing the required documents with the court or abusing the provisions of Chapter 7. In Chapter 13 bankruptcy cases, a case can be dismissed for noncompliance as well. However, a debtor has a right to dismiss the case if they cannot complete the plan as they agreed to it.
An exception to this rule is in the context of a bankruptcy case converting from Chapter 13 to Chapter 7. A bankruptcy case can only be dismissed by the debtor's motion if the dismissal is in the best interests of the creditors and the estate.