Bankruptcy Dismissed: Is that a bad thing?

“Angie” filed a bankruptcy a couple years ago with some other lawyer.  Her case was “dismissed.”  She emailed me yesterday, looking for a lawyer she could “trust.”

“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 case to be 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 case 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 to get 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.

How Do different Lawyers Stack Up?

Here’s a summary of the Top Five lawyers and “pro se” filers in Alexandria.

Nathan Fisher       Filed  361    Dismissed  70         Dismissal Rate 19%

“Pro Se”               Filed  243    Dismissed 175        Dismissal Rate 72%

Robert Weed      Filed  202   Dismissed    8       Dismissal Rate   4%

Tommy Andrews   Filed 135     Dismissed  19         Dismissal Rate  14%

Katherine Martel    Filed  71     Dismissed  18         Dismissal Rate  25%

Every person is different and every case is different.   Some cases are harder to avoid a dismissal.  Some cases you may want a dismissal.  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.