Bankruptcy Dismissed: Is that a bad thing?
“I filed two years ago and my lawyer filed too early from my one years ago and it was dismissed. I paid alot and didn’t get my bankruptcy. Trust and money are issues. Please Advise.” –Angie.
There are two ways bankruptcies end up–and the words look a lot a like. “Discharged” means the bankruptcy is approved. “Dismissed” means it’s thrown out.
So, how often are bankruptcies “dismissed?”
I took a quick look at how many have been dismissed here in Alexandria VA in the first four months of the year. Here’s what I found out.
People who filed on their own–“pro se” is lawyer-Latin for “on your own”–had 175 bankruptcies dismissed. That’s a big number. If you look here, you can see that 243 people filed bankruptcy on their own during that same time. So there were 72 dismissals for every hundred cases filed “pro se.” A dismissal rate of 72%. That gives you an idea that most people who try to do bankruptcy without a lawyer, end up failing.
Next, you see 70 cases were dismissed for lawyer Nathan Fisher. Is that bad? Well, consider that Nathan Fisher is the busiest bankruptcy lawyer in Northern Virginia. He filed 361 cases and had 70 dismissed. That’s a dismissal rate of 19%. Way lower than people who did it on their own.
I’m the second busiest bankruptcy lawyer in Northern Virginia. January – April 2012, I filed 202 cases, and had 8 cases dismissed.
I’m the second busiest bankruptcy lawyer in Northern Virginia. January – April 2012, I filed 202 cases, and had 8 cases dismissed. That’s a dismissal rate of 4%. That’s way, way lower.
Is dismissal always a bad thing?
Sometimes you want your bankruptcy dismissed.
Here one example. “Al” filed bankruptcy with me on February 3, 2012. On February 6, he was rushed to the hospital for emergency surgery. Even with insurance, his deductible is over seven thousand dollars!
Fortunately for “Al,” he was too sick to make it to his bankruptcy hearing–and his case was dismissed.
Now, he can come back and file again–and his new bankruptcy covers those hospital bills.
Here’s a second example of wanting a bankruptcy dismissed. “Erin” files Chapter 13 bankruptcy–a payment plan. Her only debts are the first and second mortgages on her house, and student loans. She’s current on the second, six months behind on the first. After she files the Chapter 13, the first mortgage gives her a loan mod, and puts the late payments on the end. “Erin” then is happy to have her case dismissed; there’s no need for her to stay in bankruptcy.
I can think of other examples–some I don’t want to put in writing–of why you sometimes want your bankruptcy dismissed. So a dismissal is not always a bad thing.
Is dismissal always a good thing?
Well, no. Most people, like “Angie” in my example, file bankruptcy because they need a discharge. And when their case is dismissed, they are upset. Like “Angie”, those people paid a lot of money and didn’t get their bankruptcy discharge. Usually, when a bankruptcy is dismissed, that’s not what the plan was when the bankruptcy started.
UPDATED: How Do different Lawyers Stack Up?
Here’s a summary of the Top Five lawyers and “pro se” filers in Alexandria. It’s updated for the first ten months of 2012.
Nathan Fisher Filed 833 Dismissed 197 Dismissal Rate 23%
“Pro Se” Filed 588 Dismissed 408 Dismissal Rate 69%
Robert Weed Filed 513 Dismissed 21 Dismissal Rate 4%
Tommy Andrews Filed 324 Dismissed 50 Dismissal Rate 15%
Katherine Martel Filed 139 Dismissed 38 Dismissal Rate 27%
Every person is different and every case is different. Some cases are harder to avoid a dismissal. Some cases you may want your bankruptcy dismissed. And you cannot expect results in your case will match what others have done.
But I’ve done this chart for “Angie” who wanted to know if she could “trust” a lawyer to handle her case, to get her a discharge; not have her case dismissed.
UPDATE 2017 Lawyers with most and least bankruptcy dismissed.
Here’s an update. For the first quarter of 2017, our bankruptcy dismissed rate was 4%. (Ninety cases filed, four dismissed.) That’s the lowest of any of the top ten bankruptcy lawyers in Northern Virginia. (Only one other, Robert Brandt, was close. His bankruptcy dismissed rate was 5%—40 cases filed, two dismissed.)
The busiest bankruptcy lawyer in Northern Virginia, Nathan Fisher, filed 173 cases January – March 2017. He had 69 bankrutpcy dismissed—40%. His cases were ten times (!) more likely than mine to be dismissed. Tommy Andrews filed 97 cases and had 23 dismissed. His cases were six times (!) more likely than mine to be dismissed.
The next six lawyers, rounding out the top ten, filed a total of 132 cases an had 32 bankruptcy dismissed. That’s 24%. Again, that’s a bankruptcy dismissed rate six times mine.
Every case is different. Sometimes you want a dismissal. Sometimes it can’t be helped. (One of my clients missed his court date because he died; obviously, that bankruptcy got dismissed.)
But when other lawyers are six times more likely—or even ten times more likely—to have their cases dismissed….well, that tells you something.
Dismissed bankruptcy cases, Northern Virginia, January – March 2017.
Thinking of filing bankruptcy without a lawyer? January – March 2017, 179 people did that. And 116 cases without a lawyer were dismissed. That’s two out of every three.