If you file for bankruptcy – whether it be Chapter 7, Chapter 13, or a non-personal bankruptcy – there are rigid terms, conditions, and follow-up requirements that must be satisfied in order for your filing to be legally valid. At any point, the court may decide to file a motion to dismiss your bankruptcy. Usually, a motion to dismiss won’t be catastrophic and you can try again soon.
Dismissal Without Prejudice
A court dismissing your bankruptcy filing without prejudice means they rejected your filing but left the door open to immediately re-filing. Dismissing without prejudice is the court’s way of gently correcting an honest mistake you made while filing. Such mistakes could include not attending a mandatory financial management course or failing to meet with your creditors at your court date.
Dismissal With Prejudice
If the court dismisses your bankruptcy with prejudice, that means they found you filed with intent to mislead about something on your documents. This could be hiding assets so you may falsely qualify for Chapter 7 bankruptcy or simply filing to take advantage of the automatic stay without intending to follow up and actually take on a personal bankruptcy.
Objecting to a Motion to Dismiss a Chapter 13
Chapter 7 and Chapter 13 bankruptcies are distinct ways to get relief from your overwhelming debts. Each type has pros and cons; however, many people simply do not qualify for Chapter 7 bankruptcy and must settle for Chapter 13. Chapter 13 requires you to enter into a payment plan (usually 3-5 years) to either fully or partially satisfy your creditors.
If your trustee files a motion to dismiss your Chapter 13 bankruptcy based on a failure to pay, then you usually have 21 days to respond to the motion. If your personal financial situation has dramatically changed since you agreed to the payment plan, then it is possible to get your plan modified. That will not be an option if your original agreement disallowed modifications.
In some cases, you may request to convert to a Chapter 7 bankruptcy or a hardship discharge if a dismissal motion was filed against you. To be clear, you or your bankruptcy trustee may file a motion to dismiss in the event you cannot make your Chapter 13 payments.
It can be difficult to get all your i’s dotted and t’s crossed when filing for bankruptcy and dealing with the emotions associated with such an event. Dismissal can be filed at the outset, during your Chapter 13 bankruptcy, or before you’ve filed all your pertinent documents. Talking with an experienced bankruptcy lawyer will help your bankruptcy go as smoothly as possible. Please get in touch with us today to get started with a no-obligation initial consultation.