What happens when a Chapter 11 bankruptcy filing is dismissed?

When a Chapter 11 bankruptcy filing is dismissed in South Carolina, it means that the bankruptcy court has decided to close the case and no longer review the debtor’s financial situation. The debtor may have asked to have the filing dismissed, or the court may have made the decision on its own. Once a Chapter 11 filing has been dismissed, the debtor forfeits any protection from creditors that was in place while the case was open. This means that creditors can again take action to collect what they are owed. The debtor may be sued by creditors, have assets seized, or have wages garnished. In some cases, the court may order the debtor to pay attorney fees. This can happen if it was determined that the debtor was irresponsible or reckless with their bankruptcy filing. When a Chapter 11 filing is dismissed, many of the debtor’s assets may remain in the hands of the court. The debtor must also still pay any taxes and other debts that may not have been discharged. Ultimately, a dismissal of a Chapter 11 filing means that the debtor has not found a way to restructure their debt. This means that the debtor must now look for other ways to pay creditors what is owed to them.

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What happens when a Chapter 11 bankruptcy filing is dismissed?

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