If you are contemplating a bankruptcy filing, it's essential to plan for it well so that your case isn't dismissed with prejudice. A dismissal with prejudice is bad for your case because it means either of these two things:
You May Be Barred From Filing another Bankruptcy for Some Time
If your bankruptcy application goes south, your first thought would be to correct the anomaly that got your case dismissed and reapply right away. However, this is not possible if your case is dismissed with prejudice. If the application had placed an automatic stay on your creditors' collection efforts, they would be free to start hounding you until the designated period elapses and then reapply.
Some of Your Debts May Not Be Discharged In Subsequent Bankruptcy
Many people who fail at their first bankruptcy applications reassess their situations, prepare, and try again. This is because they don't have alternative means of solving their financial difficulties. Unfortunately, a dismissal with prejudice may make it difficult to succeed at a subsequent hearing. This is because even if you are allowed to file for bankruptcy, you may not be allowed to discharge the debts that your first bankruptcy would have dismissed. So if those are the same debts you were still interested in discharging, you may have no reason to file for bankruptcy again.
Considering the above disadvantages of bankruptcy dismissal with prejudice, it makes sense to avoid it all costs. Luckily, that is achievable via planning to ensure that:
Don't Hide Assets
The temptation to hide assets might be overwhelming if you want to discharge your debts and keep your assets. Unfortunately, this is one of the easiest routes to getting your case dismissed with prejudice. Instead, use your bankruptcy exemptions to save the assets you wish to save. Talk to a bankruptcy lawyer for help with how to maximize your exemptions.
Follow the Courts Orders
Willfully disobeying the bankruptcy court's orders is another way of getting your case dismissed with prejudice. Once the bankruptcy case starts, prepare to follow every directive to the letter. For example, if the court requires you to complete a debt counseling class within a certain time, do it; there is no shortcut.
Don't Make Numerous Applications Unnecessarily
A bankruptcy dismissal without prejudice allows you to make a subsequent filing as soon as you wish, but you shouldn't make that step without thorough preparation. This is even more necessary if it isn't the first time your bankruptcy case has been dismissed. You need to analyze and correct your shortcomings before filing again. This is because if you make too many applications without merit, your case might be dismissed with prejudice. The court might make that move on the suspicion that you are just filing for bankruptcy to delay your credit obligations, which is an abuse of the process. Contact a business, such as Vandeventer Black LLP, for more information.