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The bankruptcy process can give you a life-changing financial fresh start. When you file under Chapter 13, you can reorganize your debt and repay some of it over time, while also having some if not most of your debt forgiven. Once your payment plan is complete, most types of remaining debts will be discharged. Until the discharge happens, certain circumstances can lead to a dismissal of your case rather than the anticipated discharge.
Paying your debts on time, choosing the appropriate Chapter, and notifying the court of any changes to your financial circumstances are some of the steps you can take to avoid a Chapter 13 bankruptcy dismissal. If a Rutherfordton bankruptcy lawyer represents you, they can help you understand your obligations and avoid a potentially costly dismissal. Our law firm will offer an initial consultation at no cost or obligation to you.
These Five Steps Can Help You Avoid a Chapter 13 Bankruptcy Dismissal
You can file bankruptcy under Chapter 13 if you are an individual, sole proprietor, or small (unincorporated) business owner. Sometimes called a wage-earner’s plan, a Chapter 13 bankruptcy filing allows those with regular income sources to create a plan to repay some or all of their debts over a three- to five-year repayment plan.
If you meet your obligations, you will receive a bankruptcy discharge once you complete your plan payments. If you do not, your bankruptcy case will be dismissed, and you will still owe your creditors.
Stick to Your Debt Repayment Plan
When a trustee requests a case dismissal, failure to make timely monthly payments is a leading reason. Two late or missed payments are often enough to prompt your trustee in this direction. Doing everything possible to make all scheduled plan payments can help you avoid dismissal.
Modify Your Debt Repayment Plan
If your financial circumstances change and you cannot make your regular payments on time, you can request a modification. Doing so means filing a motion, which a bankruptcy judge must approve. Your bankruptcy attorney can help you request a modification and draft a new payment plan.
Request a Chapter 13 Hardship Discharge
If you cannot make your payments due to circumstances beyond your control, you could ask the court to discharge your bankruptcy early. While this request is rarely granted, you could qualify if you have paid most or all of your unsecured debt.
Attend all Required Meetings Related to Your Case
Chapter 13 bankruptcy filers must attend a Meeting of Creditors. Your presence at this meeting is mandatory. The trustee will verify your identity, review your payment plan, and ensure you understand when your payments are due and how and where you can make them. Failure to attend this meeting could lead to a bankruptcy dismissal.
Communicate With Your Court-Appointed Trustee
The bankruptcy court will appoint a trustee to oversee your case. A primary part of their role is ensuring your case does not involve fraud and assessing your ability to repay your creditors. Respond to all their requests for information to keep your case moving forward toward discharge versus dismissal.
Know When a Chapter 13 Bankruptcy Dismissal Might Be the Best Choice for You
The bankruptcy trustee is not the only person who can request a dismissal of your Chapter 13 case. You, too, can request a voluntary dismissal for the following reasons:
- Your financial circumstances significantly improve.
- Your financial circumstances significantly worsen.
- You want to file for Chapter 7 bankruptcy relief instead.
Converting your bankruptcy from Chapter 13 to Chapter 7 requires filing a Notification of Conversion with the U.S. Courts. This process is complicated but could allow you to reap the greater benefits of a Chapter 7 filing, including discharging exempt debts and retaining your home, car, and other assets.
The Benefits of Converting From Chapter 13 to Chapter 7 Bankruptcy
Chapter 7 could be a more beneficial filing option for you. Some of the key differences between Chapter 13 and Chapter 7 bankruptcy include:
- Chapter 7 does not require a repayment plan.
- Chapter 7 can eliminate unsecured debt faster.
A bankruptcy lawyer can help you request this conversion, prove you qualify, and guide you toward a financial reset and life-changing debt relief.
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The Benefits of Declaring Bankruptcy With a Lawyer Versus on Your Own
Filing for bankruptcy without a lawyer is not recommended. According to the US Courts, a lawyer can assist you in the following ways:
- Explore other debt-relief options
- Select the appropriate Chapter
- Identify dischargeable debts
- Advise you on the automatic stay
- Manage required forms and filings
- Represent you in bankruptcy court
- Prepare you for the Meeting of Creditors
Hiring a bankruptcy attorney can also mean you have peace of mind in knowing your case meets all required legal parameters, and you will have an advocate in bankruptcy court.
10 Important Questions to Ask When Choosing a Bankruptcy Lawyer
Once you understand the benefits of hiring a bankruptcy lawyer, you must know how to choose the right lawyer for you. During your consultation with a bankruptcy law firm, consider asking your bankruptcy lawyer the following questions:
- Is bankruptcy right for me?
- Can I keep my house?
- How long does bankruptcy take?
- When does the automatic stay start?
Ask as many questions as needed to make the best decision for you. The lawyer you choose can make an important difference in how your case is managed.
Avoid a Potential Dismissal by Getting a Free Review of Your Chapter 13 Bankruptcy Case
If you are seeking bankruptcy protection, we can help you take steps to avoid a Chapter 13 bankruptcy dismissal. Our bankruptcy attorneys can ensure you understand the filing process and represent you from start to finish. Contact one of our team members at Farmer & Morris Law, PLLC, today for a free bankruptcy consultation.
