Difference Between a Dismissal and a Discharge
Although bankruptcy cases may seem complex, there are only two ways they could end either through a discharge or a dismissal.
Although the terms “dismissal” and “Discharge” may sound similar, their meanings are extremely different. You would be surprised to find out how different these two things are in the bankruptcy world.
So what exactly is the difference between a dismissal and a discharge in the legal world of bankruptcy? Below we will take you through the differences between the two different outcomes of a bankruptcy case.
The last thing a debtor would ever want to hear is the word “dismissal” because it generally means that your creditors win, you lose, and your debt obligations will remain in place. This is considered to be one of the worst case scenarios for the debtor.
When a bankruptcy is considered dismissed, it means that the case will end early—leaving out a discharge—and the creditors may immediately begin trying to (or continue to) collect the debts that you owe to them. This includes anything from garnishing your wages or foreclosing on your property.
Dismissals can occur for many different reasons.Some might either catalyze a failure by the debtor with the Bankruptcy Code or a default payment under the Chapter 13 plan.
On the contrary, a “Discharge” is music to the debtor’s ears. In other terms, it means that ultimately, you win and you do not have to pay the certain specified debts that were originally demanded.
Once the bankruptcy has been successfully completed, the petitioner will then earn the discharge. Once you obtain a discharge, creditors are no longer able to demand additional collections. If they did, it would be in violation with the state law because you are no longer liable for those debts.
Although you are receiving a discharge, it is important to remember that you are not being relieved from the liability of all of your debts. For example, you will still be required to pay child support, unpaid spousal support, taxes, individual housing fees, and most importantly, even your student loans! The only way that you will not have to pay your student loans off is if you can prove that you have an undue hardship, which is extremely difficult to do.
An undue hardship is when an expense is placing an extreme cost or hardship on someone.
Also, it is important to remember that your discharge can be revoked under certain circumstances – specifically if it is discovered that fraud surrounds your discharge.
If your debt has been discharged, and a creditor seeks more collection from you, you should contact an experienced bankruptcy attorney as soon as possible to help with your case.
Cibik & Cataldo is a Philadelphia based Bankruptcy firm that can assist you with your bankruptcy case. Our experienced attorneys can help walk you through this complicated process. Contact our frm at (215)-735-1060 to speak with a member of our legal team or to receive a free case evaluation.
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