Why Would the Court Dismiss Your Bankruptcy Case?
Bankruptcy can be a good option for people struggling with overwhelming debt. Filing for bankruptcy can allow you to discharge your debts. It can give you a chance to start over financially. However, not all bankruptcy filings are successful. Sometimes, the court may dismiss a bankruptcy case before issuing a debt discharge. Understanding the reasons why a court would dismiss your bankruptcy is vital. Read on to learn some of the common reasons why bankruptcy cases are dismissed and what happens after a bankruptcy case is dismissed.
Why Would the Court Dismiss a Bankruptcy Case?
There are numerous reasons why a Chapter 7 or Chapter 13 bankruptcy case would be dismissed, including the following;
- Incomplete or Inaccurate Paperwork
Filing for bankruptcy requires submitting various documents, including a bankruptcy petition, schedules, and other documents. One common reason bankruptcy cases are dismissed is the failure to file complete and accurate paperwork. To avoid dismissal, it is vital to ensure all documentation is thorough and correctly filled out.
- Failure To Complete the Mandatory Education Courses
All debtors must complete a credit counseling course before filing for bankruptcy. A debtor must undergo counseling within 180 days before filing for bankruptcy. The primary purpose of credit counseling is to allow you to evaluate your financial situation and understand your other options. Credit counseling helps you ensure that bankruptcy is the right option for you. If you don’t complete this counseling or fail to provide the necessary documentation to the court, your case may be dismissed.
If you fail to complete your 2nd Debt Counseling Course after your bankruptcy case is filed, then your bankruptcy case may be closed without a discharge order being entered. If this happens, then you would need to complete it and pay the filing fees of $260.00 to file a Motion to Reopen your Chapter 7 Bankruptcy Case, which has the possibility of not being granted as it in the Court’s discretion whether to reopen a case to submit your 2nd course untimely and to still grant a discharge order.
- Failure To Make Required Payments
You are required to pay a filing fee to the court so the court can administer your bankruptcy case. Your bankruptcy case may be dismissed if you don’t make the necessary fee payments.
In the case of a Chapter 13 bankruptcy, your case may be dismissed if you fail to make monthly payments. Under Chapter 13 bankruptcy, the debtor develops a repayment plan outlining how they will repay their creditors over a specified period. Debtors need to stay up to date with their payment obligations to avoid a dismissal.
Failure to make 2 monthly payments may result in a Motion to Dismiss being filed by the Chapter 13 Trustee.
In order to resolve any pending Motion to Dismiss filed by the Chapter 13 Trustee, the Trustee will normally require a wage garnishment to ensure future compliance with your repayment plan and may require you to file a modified plan to deal with any plan arrears. If you need your repayment plan temporarily suspended, typically the Trustee is willing to permit a maximum of 3 months without filing a motion to modify a confirmed repayment plan to cure plan arrears.
- Failure To Attend the Meeting of Creditors
After filing for bankruptcy, you are required to attend a 341 meeting, also called the meeting of creditors. This is a mandatory meeting where the bankruptcy trustee asks the debtor questions about their bankruptcy papers and financial affairs under oath. Creditors can also attend this meeting and ask questions, but often, few or no creditors appear.
What Happens After a Bankruptcy Case Is Dismissed?
After the court dismisses your bankruptcy case, you lose the automatic stay protection, meaning creditors can pursue you for payment. Fortunately, if your case is dismissed without prejudice, you can refile. However, you should note that refiling might result in you not getting adequate protection from the automatic stay. Refiling within a year of filing another bankruptcy case results in the stay lasting only 30 days. If you filed two or more cases during the last year, you won’t get the automatic stay protection.
Contact Us for Legal Help
If you are struggling with overwhelming debt and considering bankruptcy, don’t navigate this complex process alone. Contact our qualified Lehighton & Carbon County bankruptcy attorney at Adam R. Weaver, Esq. for a consultation and allow us to guide you.
Source:
law.cornell.edu/wex/341_meeting
