My Case Was Dismissed, Now What?

Your bankruptcy case was dismissed and now you want to know what options you have. It first depends on what chapter of bankruptcy you filed and then on why the case was dismissed.

Chapter 13

A chapter 13 has numerous ways and reasons for being dismissed. Most can be prevented and even more can be remedied. All of the reasons listed above for ways that a Chapter 7 can be dismissed apply to a Chapter 13 as well. If the Debtor or Debtors do not appear at the Trustee’s 341 Meeting of creditors the trustee will continue it to another date for Debtor or Debtors to appear. However, if Debtor or Debtors do not appear at the continued Trustee’s 341 Meeting of creditors, the trustee can move for dismissal of the case.

However, there is many more way that a Chapter 13 can be dismissed. Given the multitude of reasons for dismissal, only about 25% of Chapter 13 cases see completion. Given the frequency of some of the dismissal reasons, attorneys have begun to safe guard against these issues by requiring the clients to comply with certain guidelines and provide certain documents prior to a case being filed. The reasons for dismissal and ways to avoid them are discussed below.

A Chapter 13 bankruptcy can also be dismissed for prior filings. While you do not have to be eligible for a discharge to be a Chapter 13 debtor, frequent filings can lead to trustee or creditor request for dismissal. The most common occurrence of this is a Debtor who is filing to stop a foreclosure. The first case or even second case is usually not a problem but if you have created a pattern of filing a Chapter 13 right before a foreclosure sale is scheduled to occur and then you let the case be dismissed until refilling right before the foreclosure sale is scheduled to occur again. In these cases the trustee and more often the creditor for the mortgage company will file a motion to dismiss or an objection to confirmation stating that the case was filed in bad faith only to delay the inevitable foreclosure. Sometimes depending on the change in circumstances and reason for refilling, the Judge may overrule their objection and allow you stay in the Chapter 13 but that usually requires a wage order and some substantial change in income.

A less common, but certain possible way of having a Chapter 13 case dismissed is for Debtors failure to cure trustee’s objection within a reasonable time such that it results in undue delay impacting creditors. Objections can range from things as simple as clarification on something listed on the petition, to turnover of tax returns to more complex things such as inaccurate exemptions or non-disclosure of assets, debts or transfers. To avoid objections disclose everything to your attorney prior to filing. However, if you still receive notice of an objection through the mail, contact your attorney to verify that they do not need any information from you in order to cure the objection. If amended plans are required in order to cure an objection that must be filed 21 days prior to any possible confirmation date so it is imperative not to deal in providing requested information.