Dismissal, Conversion & Closing Of A Bankruptcy Case, What Are The Differences Between Them?
A) Dismissal vs. Closing of a Bankruptcy Case -- The main differences between dismissal and closing of a bankruptcy case involve discharge, ability to file another bankruptcy case, and the consequences of filing another bankruptcy case.
- Dismissal of a Bankruptcy Case – Dismissal ordinarily means that the court stopped all proceedings in the main bankruptcy case AND in all adversary proceedings, and a discharge order was not entered. Dismissal can occur because a debtor requested the dismissal and qualifies for voluntary dismissal. Dismissal can also occur without a debtor's consent if the court orders dismissal on its own, or a trustee or a creditor files a motion to dismiss the bankruptcy case and the court grants the motion. See related FAQs below.
- Closing of a Bankruptcy Case – Closing means that all activity in the main bankruptcy case is completed. This means that all motions have already been ruled upon, and if a trustee was appointed, the trustee has filed a statement that all trustee duties have been completed. See related FAQs below.
Closing does not mean that a discharge was entered unless all activities related to determining discharge have been completed. If a bankruptcy case is closed without a discharge because an individual debtor did not timely file a Certificate of Completion of Instructional Course Concerning Personal Financial Management, a debtor must file a Motion to Reopen the Case.
Closing does not necessarily mean that all adversary proceedings are finished. For information about adversary proceedings, see related FAQs below.
B) Conversion to Another Bankruptcy Chapter – Conversion means that the court has approved changing a bankruptcy case from one chapter to another chapter. Conversion may be requested by a debtor, by a trustee or creditor, or be independently ordered by the court. Sometimes conversion is automatically approved, and in other situations it is disallowed or requires a court hearing to approve a motion to convert. In some ways, conversion starts the bankruptcy case over because there are different rights and duties for the debtor and creditors. In other ways, conversion continues activities that are already taking place. It is highly recommended to consult a bankruptcy attorney to discuss a debtor's right to convert to another chapter and the impact of conversion. See related FAQs below.