A canceled bankruptcy is considered a dismissed bankruptcy by the court system. A federal judge dismisses your bankruptcy filing because of procedural errors, or because you failed to comply with terms established by the court. You may have taken on new debt without the court's permission, or the court discovered that you had not been truthful about your income or assets.
More Credit Problems
A canceled or dismissed bankruptcy opens the door for creditors and debt collectors to resume collection efforts. A legal injunction called an "automatic stay" protects you while the bankruptcy is in effect. The automatic stay prohibits creditors and debt collectors from trying to collect from you while you are under the protection of the bankruptcy court. With the automatic stay intact, debt collectors are not allowed to continue lawsuits, harass you or attempt to garnish your wages. However, they'll all be notified by the court if the bankruptcy is dismissed, and your credit problems will resume.
Filing New Petition
Bankruptcy laws allow you to re-file your bankruptcy petition if your original case was dismissed. Hire an experienced bankruptcy attorney to correct any mistakes and submit new paperwork. A re-filing will again make you eligible for the automatic stay and protection from your creditors. The disadvantage of a second filing is the cost. You'll have to pay filing fees again, which are $299 for Chapter 7 and $274 for Chapter 13, as of 2011. Attorney fees are additional.
Contacting Lenders
It is important to contact your lenders if you are unable to re-file because of financial or other reasons. Speaking frankly to your lenders about your situation could help avoid foreclosure, automobile repossession or debt lawsuits. You should make personal contact with each lender to work out payment plans. Be upfront about your situation and never promise to pay more than you can afford.
Credit Counselors
Seek help from government-certified credit counselors if you are reluctant to contact lenders personally. Credit counselors offer debt management plans that are somewhat similar to bankruptcy. The plans require a commitment of 4 to 5 years, during which time your finances and budget will be managed by the counseling agency. You'll be charged a monthly management fee as the counseling agency speaks to lenders on your behalf, pays most of your bills and sets up payment plans designed to eliminate or greatly reduce your debt. Government-approved credit counselors, such as those affiliated with the Consumer Credit Counseling Service, are located in most communities.
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