The Difference Between Bankruptcy Cases Dismissed Without Prejudice Vs. With Prejudice

When a person files for bankruptcy, there is no guarantee that the bankruptcy court will approve the case and allow the person to use this system for debt-relief purposes. While most cases will get approved, there are also many times when the court will dismiss a person's case. If you are preparing to file for bankruptcy, you should understand the two main types of dismissals courts use when they throw cases out.

Dismissed without prejudice

The first type of dismissal is called "dismissed without prejudice," and this is the better option of the two for anyone who files for bankruptcy and ends up getting their case dismissed. There are a lot of reasons the court will choose to dismiss a case without prejudice, including when a person fails to submit all the necessary documents the court requested. Additionally, the court can dismiss without prejudice if the trustee finds that you are not eligible for bankruptcy. To find this out, the trustee will analyze and evaluate all the papers you sent in, along with all the information they contain. If you fail to show up to your required court hearings, or if you do not complete the credit counseling courses that are required, you may also end up with a dismissed case.

If this happens to you, you will have the ability to refile for bankruptcy in the future; however, you may have to wait a certain length of time before you do so.

Dismissed with prejudice

Getting your case dismissed with prejudice is very different from getting it dismissed without prejudice. The basis in which a trustee will dismiss a case with prejudice typically involves times when people try to deceive or abuse the system. Typically, if the trustee finds out that you lied about something on your paperwork, you could end up with your case dismissed with prejudice. Additionally, if you break a court order during your case, the court may also dismiss your case with prejudice.

If your case is dismissed with prejudice, you might be able to file again; however, there are times when the court issues an order that prohibits a person from ever filing again after having a case dismissed with prejudice.

In either case, having the court dismiss your case will result in receiving no help for your debt problems and will lead you right back to square one. To prevent this from happening, you should make sure you are completely honest with the information you give your bankruptcy lawyer when filling out paperwork for the case. To learn more, contact a bankruptcy law attorney, such as C. Taylor Crockett, P.C., in your town.