Bankruptcy Case: Dismissed Without Prejudice

If the court dismisses your bankruptcy case without prejudice, you can file another bankruptcy case immediately. But you'll typically have to fix your original mistakes before your second case is successful. Also, if you want to keep creditors at bay, you should plan to file a motion to extend or impose the automatic stay in your new case.

Read on to learn more about what happens when your bankruptcy is dismissed without prejudice and how the dismissal can affect the automatic stay in your next bankruptcy filing.

What "Dismissing Your Bankruptcy Case Without Prejudice" Means

When you file for bankruptcy relief, you must satisfy certain requirements to complete your case and obtain a discharge. If you don't complete all the necessary steps, the court can dismiss your case with or without prejudice.

While it can be frustrating to have your bankruptcy case dismissed, a dismissal without prejudice is much better than one with prejudice. If the court dismisses your bankruptcy without prejudice, you can immediately file another case as long as you are otherwise eligible. Fortunately, most bankruptcy dismissals are without prejudice unless you abuse the bankruptcy process or willfully disobey court orders.

Common Reasons the Court Might Dismiss Your Bankruptcy Without Prejudice

In most cases, if you make a procedural mistake, you aren't trying to abuse the bankruptcy system , and the court will dismiss your bankruptcy without prejudice. Except in rare circumstances, the court will typically dismiss your case without prejudice if you:

• fail to file a required form with the court
• fail to provide all necessary supporting documents (such as tax returns and pay stubs) to the bankruptcy trustee
• don't appear at a mandatory court hearing such as the meeting of creditors or the Chapter 13 bankruptcy confirmation hearing
• fail to pay the court filing fees
• don't meet all eligibility requirements for the type of bankruptcy you wish to file (for example, if you have too much debt to qualify for Chapter 13 bankruptcy)
• don't complete the mandatory credit counseling course before filing your case
• fail to make your Chapter 13 plan payments, or
• commit any other minor procedural error.

To learn more about why the court might dismiss your bankruptcy, see Reasons the Trustee or Court Might Dismiss Your Bankruptcy Case.

You Won't Have the Same Protection From Creditors If You Refile

When you file for bankruptcy, an automatic stay goes into effect, prohibiting most creditors from starting or continuing collection activities. If you file multiple bankruptcy cases, bankruptcy laws impose certain limits on the automatic stay. The rules discourage debtors from filing for bankruptcy simply to delay or hinder their creditors.

Here's how it works.

If the court dismisses your bankruptcy case and you file another case within one year, the automatic stay in your new bankruptcy will expire 30 days after your filing date. If you had two or more pending bankruptcies that the court dismissed within the past year, you wouldn't get any automatic stay benefit if you refile.

However, getting the court to put the stay in place is possible. If you have a good reason for the new filing—or why the previous filings occurred—then you can file a motion with the court asking for the automatic stay. The court will grant your motion if you prove you filed the case in good faith.