If you get yourself into a position where you can afford to repay your debt but you’re always working through a Chapter 7 bankruptcy, you may be wondering if you can cancel the bankruptcy and avoid having it on your record.
Unfortunately, you don’t have the right to voluntarily dismiss the bankruptcy. Instead, you will need to talk to your attorney about filing a motion to dismiss and getting the court to approve it. Additionally, even if you do receive approval to have the bankruptcy dismissed, you may still have the bankruptcy on your credit report for up to the next ten years.
If your dismissal works against your creditors, it might not go through
One thing to know about apply to have the bankruptcy dismissed is that the trustee may not agree to the dismissal if they believe that getting the case dismissed will hurt the creditors. It will be up to you to defend your case against the trustee.
Trustees don’t always object. For example, if you came into money and will be able to pay all your debts in full, the trustee may agree that it’s in the creditors’ best interests to allow the dismissal instead of potentially losing funds in a bankruptcy. However, if you just ask to have the case dismissed and don’t have enough to pay, then the trustee might argue that it would be more harmful than helpful, and you could end up having to go through with the full bankruptcy.
If you get your bankruptcy dismissed, you may apply again
Usually you can apply for bankruptcy again even if you had it dismissed in the past, but how soon you can do so will vary based on your case. If you had the case dismissed recently because you forgot to make a payment or forgot to file a piece of paperwork, you may be able to get it reinstated if you file a motion to reinstate quickly.
Generally speaking, it doesn’t make sense to dismiss a bankruptcy after you apply, because it still hurts your credit. However, if you need to, then that is something to discuss with your attorney.