You may have hastily filed for consumer bankruptcy while in a dire financial situation. However, since then, you may have gotten a higher-paying job, received a significant inheritance, or successfully renegotiated an outstanding debt, which has made your situation all the more manageable. At this point, you may even question whether you need bankruptcy aid at all. Well, without further ado, please continue reading to learn whether you can voluntarily dismiss your bankruptcy case once you already initiated it and how an experienced Louisville, Kentucky consumer bankruptcy lawyer at Schwartz Bankruptcy Law Center can help you understand the gravity of this decision.
Can I voluntarily dismiss my bankruptcy case once it already started?
Yes, you hold the right to file a motion to voluntarily dismiss your bankruptcy case, even if your proceedings have already commenced. However, this right is not absolute, as the Kentucky bankruptcy court does not have to automatically grant the dismissal. Rather, you must successfully establish a valid cause for dismissal, whether it be your higher-paying job, inheritance, debt renegotiation, or otherwise. Further, you must demonstrate that this dismissal would not put your creditors at a significant disadvantage, and rather show that it would work in everyone’s best interests.
At this time, your Chapter 7 bankruptcy trustee may come forward and file an objection to a request for voluntary dismissal if they believe you cannot handle it. Or, your Chapter 13 bankruptcy creditors may accuse you of acting in bad faith. Either way, you may have to defend your reasonings in a court hearing. In the end, the court may rule that following through with your bankruptcy proceedings is the best option for all parties involved.
What are the potential repercussions of dismissing my bankruptcy case?
Even if the court grants your motion to voluntarily dismiss your bankruptcy case, you must understand that this does not necessarily mean that this incident can be completely erased and that you can resume your life as normal. In reality, there are serious repercussions to doing so that you must deeply consider and evaluate with your lawyer. They read as follows:
- You may no longer have rights to an automatic stay in a future, subsequent bankruptcy case.
- You may no longer be eligible to file a future, subsequent Chapter 13 bankruptcy case altogether.
- You may no longer have protection from your creditors’ collection efforts, which may resume effective immediately.
- You may no longer get your debts discharged, so your creditors may pursue the full repayments of your outstanding debts.
- You may have accrued high interest on your outstanding debts, which you are now expected to pay back in full.
- You may still experience a negative effect on your credit score, which will take some time to rebuild and impact your borrowing ability.
If you need legal representation fast, a skilled Louisville, Kentucky consumer bankruptcy lawyer is prepared to step up. The team at Schwartz Bankruptcy Law Center looks forward to meeting you, working with you, and helping you.
