The Stay Is Gone
When your bankruptcy case is dismissed, the automatic stay under Section 362 terminates immediately. This means all the protections you had during the case -- against garnishment, foreclosure, repossession, and lawsuits -- are gone. Creditors can resume collection activity the moment the dismissal order is entered.
What Creditors Can Do After Dismissal
- Resume wage garnishment: If garnishment was in place before filing, creditors can restart it. If a judgment was entered but garnishment had not started, they can initiate it.
- Proceed with foreclosure: If your home was in foreclosure, the bank can pick up where it left off.
- Repossess vehicles: Auto lenders can repossess your vehicle if you are in default.
- File or continue lawsuits: Creditors can sue you or continue lawsuits that were paused by the stay.
- Send to collections: Collection calls and letters resume.
Immediate Steps to Take
- Contact your most aggressive creditors: If you have a mortgage in default or a car payment behind, reach out immediately to discuss workout options, forbearance, or repayment plans.
- Review your budget: If the bankruptcy was dismissed for failure to make plan payments, identify why and whether a modified plan might work.
- Consider refiling: If the 109(g) bar does not apply, you may be able to refile immediately. But be aware of the reduced stay protections under Section 362(c). See our waiting period guide.
- Explore non-bankruptcy options: Debt management plans, debt settlement, or negotiated workouts may be appropriate depending on your situation.
- Protect exempt property: Even outside of bankruptcy, certain property may be protected from creditors under state exemption laws (homestead, retirement accounts, etc.).
Free eligibility check: Use the discharge eligibility screener at 1328f.com to verify whether timing bars affect your ability to refile and receive a discharge.