Discharge = Good. Discharged debt means debt is forgiven.
The discharge of a debt in bankruptcy means that the debtor is no longer legally required to pay the debt. The debtor is protected by the court from any further collection actions on a discharged debt from creditors [such as lawsuits and phone calls]. The discharge of debts, and protection from creditors is the primary focus of consumer bankruptcy for the debtor.
Dismissal = Bankruptcy filing is void. Debts are not discharged.
Where discharge of debts is what the filer wants, involuntary dismissal of a bankruptcy case is not. Dismissal of a bankruptcy case means that the bankruptcy case is void. The debtor who declared bankruptcy is back in the same position they were before filing, and the creditors may act as if the filing had never occurred.
Reasons for dismissal vary, from voluntary dismissal, innocent mistakes, to outright bankruptcy fraud. If the judge finds that the debtor has not filed his or case in “good faith,” the case may be dismissed with prejudice. Consequences of such a dismissal may result in a temporary bar from re-filing [usually 6 months], to a permanent ban on discharging the debts in the dismissed case that otherwise would have been dischargeable.
If you’re contemplating filing bankruptcy, hire a competent bankruptcy attorney who will provide legal guidance, build your case from the ground up, and prevent simple mistakes that lead to dismissals.
A Bankruptcy Law Blog 