It doesn't happen often, but there are times when debtors file for bankruptcy and then want to back out of it at the last minute. This usually occurs when the most immediate and frightening financial threat has been resolved - whether it was the fear of foreclosure
or a particularly aggressive debt collector. When people file for bankruptcy in order to put a stop to a particular crisis - once that crisis has been averted, sometimes bankruptcy doesn't seem so desirable anymore.
The thing about filing for bankruptcy is that it is not something you should ever enter into casually or without seriously consulting with an experienced bankruptcy attorney first. Your decision to file for bankruptcy will affect many different people/creditors - not to mention: YOU
! Even if you are able to have your bankruptcy case dismissed, your credit report will show that you have at one point at least filed for bankruptcy. This will not look good to future lenders, banks and potentially even employers.
Let's say that you (hopefully with the help of your well-trained and seasoned NJ bankruptcy lawyer
) have decided to file for Chapter 13 bankruptcy. This means that you've decided that you will be able to repay your debts as long as they are reorganized so that they are in line with your financial situation. In this type of bankruptcy proceeding, the filer can
make a formal request to the bankruptcy judge for voluntary dismissal
of their case, should they decide not to go forward with it. The judge is the only person or entity who is able to dismiss your Chapter 13 bankruptcy.
A Chapter 7 bankruptcy is even harder to have dismissed. As the filer, you cannot request a voluntary dismissal. You and your attorney can file a Motion to Dismiss your case, which will be reviewed carefully by the bankruptcy court and your trustee. If it is found that your wish to cancel your bankruptcy is due to fraudulent reasons, you will not only be forced to stay in bankruptcy court, but you may also be held in contempt.
Keep in mind that if your financial situation has reached the point where you have taken the steps to actually file for bankruptcy, there is a very real possibility that you will experience similar problems again in the future. Remember that the dismissal of a bankruptcy case (even if voluntary) does not mean there will be no evidence of the bankruptcy. It will remain listed on your credit report for all future potential lenders and employers to see, and will cause your credit score to drop.
We are big proponents of using bankruptcy to get your life back on track. If you've gone so far as to find a bankruptcy attorney in NJ and have filed the bankruptcy paperwork, we urge you to reconsider
turning back now. Take a good hard look at what choices got you to this point in the first place. The bankruptcy will be noted on your credit report either way, and going through with the bankruptcy will give you a (likely) much needed fresh start.