Bankruptcy: Discharge vs. Dismissal

When filing for Tampa bankruptcy many people don’t know much about the process they are trusting with their debts, let alone the forecasted end result. It isn’t uncommon for an unsuspecting debtor to find their case denied by the court and not obtain the debt relief they were seeking. Here is what you need to know about the potential outcome of your case:

Discharge —  occurs when your case is successfully completed and closed with the court. A debt discharge releases you from liability over any remaining portion of your debt and essentially severs the relationship of you from your prior debt balance. A discharge is the outcome you are wanting when you seek help from the bankruptcy process. Another thing to note about a discharge is that it often will make the automatic stay order permanent. In other words, debts that are discharged become permanently “uncollectible” by your creditor.  A discharge can only occur when you have met all of the paperwork, credit counseling and payment requirements outlined by the court.

Dismissal — occurs when your case is denied and closed by the court. Dismissals can occur due to suspicions or confirmations of fraud, failure to meet eligibility requirements or failure to comply with the bankruptcy code requirements. Dismissals can also be voluntary, in which you request to have your case terminated by the court, or involuntary, in which the court takes action independently to terminate your case. This is not the outcome you are seeking when filing for bankruptcy in most cases. Further, a case dismissal leaves your debts unresolved and you fully liable for payment of the debt.

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