The ultimate goal of most bankruptcy cases is to receive a discharge. A discharge is the result of an order signed by a bankruptcy judge which shields the debtor from future attempts to collect debt. The bankruptcy judge signs this order at the very end of the bankruptcy case. In Chapter 7 cases the order is signed 3 to 5 months after filing the bankruptcy petition. In Chapter 13 cases the debtor receives a discharge after the reorganization plan is completed which is usually three to five years after the petition is filed.
Unfortunately, sometimes cases are dismissed before the debtor receives a discharge. Bankruptcy cases are dismissed for a lot of different reasons. The most common reasons include failure by the debtor to pay plan payments timely, failure to file paperwork, and delays in confirming the Chapter 13 plan. Dismissal is rare in Chapter 7 bankruptcy cases but it is a common occurrence in Chapter 13 cases. Cases are dismissed for a variety of reasons including death, illness, loss of job, injury, and divorce. Chapter 13 cases last several years and unfortunately bad things happen sometimes, which prevent debtors from succeeding in their bankruptcy case.
When a case is dismissed the automatic stay is lifted. Debtors are able to begin debt collection immediately, including garnishment, foreclosure, repossession, bank levy, and creditor harassment as allowed under state law. If the debtors circumstance changes, they may be able to reinstate their bankruptcy case to continue their Chapter 13 case or to convert it to a Chapter 7 case. Whatever the situation may be, debtors should discuss their options with a qualified bankruptcy attorney.