Bankruptcy laws clearly state that no petitioner, who has a previously dismissed case, can file again unless the 180 day period has lapsed. This provision of the law can sound very simple but for petitioners whose homes or factories are for foreclosure or vehicles are for repossession, this rule of law can determine their bad fate. Therefore, it is highly important that petitioners avoid getting their bankruptcy cases dismissed. And for this reason the important precepts that lead to dismissal should be noted and considered at all times.
Dismissal of a business debtors bankruptcy case can happen according to Chapter 11 Bankruptcy Laws for non-payment of fees, post-petition taxes and domestic support obligations. It can also happen for non-submission or untimely submission of required information, documents, operating and financial reports and even post-petition tax returns. Most of all, it can happen if the company show incapability to complete the confirmed reorganization plan due to continued loss of business operations, gross mismanagement or inability to maintain insurances required by law.
However, Chapter 13 Bankruptcy Laws would show that non-completion of the credit counseling course and non-payment of the filing and administrative fee and the post-petition domestic obligations are the main causes of dismissal. And of course, non-confirmation of the repayment plan or non-completion thereof will definitely cause dismissal as well. Most of the time, the bankruptcy court will allow conversion of the petition into a Chapter 7 bankruptcy for an additional fee of $25 instead of dismissing the case. There are also cases when a hardship discharge is granted by the court instead of dismissal.
Chapter 7 Bankruptcy Laws would have the same grounds for dismissal as Chapter 13 except for the non-completion of the plan. In a liquidation bankruptcy, no plan is submitted but the petitioner faces the possible challenge of overcoming the presumption of abuse. Abuse is presumed when consumer debts are higher than business debts based on a certain way of calculating income and unsecured debts. However, the petitioner can always rebut such presumption by showing proof to the court. However, the petition can also be converted to a Chapter 13 for free instead of getting dismissed. Nevertheless, most Chapter 7 bankruptcy petitions gain a discharge making it the most popular petition for most individual debtors.
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