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Can I Dismiss My Bankruptcy Case?

For most people, declaring bankruptcy isn’t a snap decision. If you opted to file for protection under Nevada’s bankruptcy laws, you probably thought long and hard about it before filing your petition. And while that might be the case for every debtor, in some instances a debtor may decide that continuing on with their bankruptcy is in their best interest. The problem is that it’s much easier to get into a bankruptcy court than to get out of one. It is possible to voluntarily dismiss your bankruptcy – you’ll just need to court to approve of the dismissal first. This can be easier said than done given the chain of events a bankruptcy filing can set off. Because of the pitfalls and consequences of dismissing a bankruptcy, it is important to discuss your options with a Nevada bankruptcy attorney before you file.

VOLUNTARY DISMISSAL – HOW IT WORKS

In most civil cases in state courts around the country, dismissing a case you have filed is simple. Often, you have the absolute right to dismiss your case at any point before the trial begins. That isn’t the case in bankruptcy court, however. That’s because the filing of your bankruptcy petition caused a major disruption for your creditors due to the protections provided by the automatic stay. It’s possible that a sudden dismissal of a bankruptcy case could actually prejudice your creditors, which is why the judge must sign off on your dismissal first.

To seek a voluntary dismissal, you will have to file a motion for voluntary dismissal with the court and serve all the parties involved, including:

  • Your creditors
  • The Trustee
  • The Court

You will also have to set this motion for a hearing before the judge. At the hearing, your creditors will have an opportunity to object to the dismissal. You will also have your opportunity to make your case to the judge why the dismissal should be granted. The court will weigh what you say in an effort to determine if you are genuine. While your motives might be pure, there are plenty of instances of debtors filing frivolous petitions in bad faith and then dismissing the case later. If the court believes you are acting in good faith and have not prejudiced your creditors, the judge will grant your request for a voluntary dismiss.

EFFECTS OF A DISMISSAL

Once your case is dismissed, the protections provided by the bankruptcy stay will disappear. Your creditors will be able to resume collection efforts against you, including wage garnishments and property levies.

What’s more, the notice of your bankruptcy filing will remain on your credit report even though your case was dismissed without discharge. This is the worst of both worlds – you will face the consequences of a bad credit report for years without the discharge to show for it.

In most cases, it is a good idea to avoid dismissing your bankruptcy. More importantly, the need for a sudden dismissal of your case may be avoided by hiring a Nevada bankruptcy attorney. With the right advice prior to filing your petition, you may be able to avoid the need for a dismissal. Contact the experienced Nevada bankruptcy attorneys at Vohwinkel Law to learn more.

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