RESEARCH & LEARN

Bankruptcy Dismissal and Your Options


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TERMINOLOGY

If you filed for bankruptcy and received a dismissal, the first thing you should do is closely examine the reason for the dismissal. There are several reasons, both voluntary and involuntary, in which a bankruptcy can be dismissed by the courts. If the dismissal was due to a serious offense, contact a lawyer. Once a bankruptcy is dismissed, your creditors are allowed to contact you about the debt owed to them. In addition, dismissals will affect your credit negatively and remain on your report for 7-10 years. There are still other options available to you to help with your debt.

Appeal

The first option is to appeal the decision. In order to determine if this is a viable option, you can contact the courts. If so, you can make the corrections that caused the dismissal. If you have questions about the mistake, it would be best to consult an attorney because you can eliminate the possibility of the case being dismissed again.

Re-file

The second option is to re-file your bankruptcy case with the courts. If you re-file within the first year of the dismissal, an automatic stay will be granted for 30 days. The automatic stay will prevent creditors from trying to collect on the debt. If you will need the stay beyond the 30 days, an extension will be need to be filed with the court. During this time, the courts will review your circumstance and determine if the bankruptcy will go into affect or be dismissed. If you file two bankruptcies however, you will show two bankruptcies on your credit report.

Negotiating with Creditors

If the courts do not allow the bankruptcy to be granted, your third option should be to attempt to work with your creditors to create a settlement amount for the debt owed. Sometimes creditors will lower the interest rate or settle. Your creditors may have knowledge about your situation. When you talk to your creditors, remember to explain your circumstances. It may take several attempts to work out a payment plan, but it is worth the time and effort if your creditor is willing to work with you. Negotiating with creditors can help save your credit and reduce your debt.

Credit Consolidation

The final option is to consult a credit consolidation agency. Credit consolidation agencies work with people who are having issues meeting there debt obligations by offering credit counseling and debt management plans. These agencies contact your creditors and develop a repayment plan that will be affordable and meet the needs of both parties involved. This can be a great option because not only are you paying off your debt, but also you are learning how to be fiscally responsible and create a savings plan.