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What Happens When a Bankruptcy Case Is Dismissed in Texas?

When a bankruptcy is dismissed in Texas, the case is closed out without any of your debts being discharged. The dismissal process begins when the debtor, the trustee, or a creditor submits a motion to request a dismissal. However, the court is not required to grant this request.

The decision will depend on various factors, such as:

  • The type of bankruptcy filed
  • The reason the dismissal was requested
  • How far in the process the filing has progressed
  • How the dismissal would impact the creditors

What Does a Dismissed Bankruptcy Mean?

If your Texas bankruptcy case is dismissed, it will be closed before you obtain a discharge, meaning that you will remain responsible for all of your debts. It also means that you lose the protection of the automatic stay, which is a court order forbidding creditors from collecting on your debt while your bankruptcy is pending.

Cases can be dismissed for various reasons, ranging from fraud to a simple clerical mistake. Some of the most common reasons for dismissals in Texas include:

  • Failing to complete credit counseling
  • Failing to pay the filing fee or apply for a fee waiver
  • Filling out the wrong forms
  • Not including required supporting documents
  • Completing papers with fraudulent information
  • Making too much money to qualify for Chapter 7
  • Failing to attend the meeting of creditors
  • Failing to comply with your Chapter 13 repayment plan

What Is the Difference Between Discharged and Dismissed?

When you file for bankruptcy in Texas, you are probably hoping to have your debts discharged. If the court gives you a discharge order, your obligation to repay the debts included in the order is eliminated. On the other hand, a dismissal means that there was something wrong with your case, and the court threw it out before you receive a discharge.

Can a Dismissed Bankruptcy Be Removed From the Credit Report?

Dismissed bankruptcies will be reported on your credit when the court processes the dismissal and informs the reporting agencies. Even if your debts were not discharged, credit bureaus are required to report dismissals for up to 10 years, just as a discharged case would be listed.

However, if a filing was included on your report erroneously, you can file a dispute with the credit agencies to have it removed. If the Texas court that reported the filing cannot produce records that show you filed, you can request that it issue an order to have it removed from your credit report.

Avoid Dismissals with a Texas Attorney

Many bankruptcy dismissals occur when debtors try to file their cases on their own, without the help of an experienced Texas lawyer. When their cases are thrown out, they must incur the additional expense of filing again, often only to face another motion to dismiss. Because bankruptcies can be dismissed for minor errors, it best serves you to have a knowledgeable attorney handle the filing process on your behalf.

The skilled legal team at DebtStoppers can help you eliminate your debt and ensure your case is filed right the first time.