Dismissal Conversion & Closing Of A Bankruptcy Case What Are The Differences Between Them
A) Dismissal vs. Closing of a Bankruptcy Case — The main differences between dismissal and closing of a bankruptcy case involve discharge, ability to file another bankruptcy case, and the consequences of filing another bankruptcy case.
Closing does not mean that a discharge was entered unless all activities related to determining discharge have been completed. If a bankruptcy case is closed without a discharge because an individual debtor did not timely file a Certificate of Completion of Instructional Course Concerning Personal Financial Management, a debtor must file a Motion to Reopen the Case.
Work With A Chicago Bankruptcy Attorney
Bankruptcy is complicated. No two bankruptcy cases are alike each has to be carefully developed around the bankrupt party’s individual needs. If you are considering filing for bankruptcy, work with an experienced Illinois bankruptcy attorney to ensure that your rights are protected and your interests are represented accurately to the court. Contact our team at Newland & Newland, LLP today to schedule your free legal consultation with our firm. We are here to help you get through your bankruptcy as smoothly as possible.
What Are Your Chapter 13 Dismissal Options
You have several options for debt relief after a Chapter 13 dismissal. You can re-file under Chapter 7 or Chapter 13. However, depending on the reason for the dismissal, the automatic stay may not go into effect without filing an additional motion with the court. There could also be a penalty period before the automatic stay becomes effective. During this time, creditors could continue to pursue actions to collect debts. Also, the dismissal of a Chapter 13 case with prejudice may result in a mandatory waiting period to re-file bankruptcy.
Regardless, we built the following debt relief options calculator to help you compare your different options once your Chapter 13 has been dismissed. The most common may be debt settlement or converting to a Chapter 7 before a dismissal. The Debt Relief Options calculator uses bankruptcy forms to estimate whether you would qualify for a Chapter 7,. We provided some additional information below the calculator for you to review.
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S To Take When Your Bankruptcy Case Is Dismissed
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One of the worst outcomes any debtor could deal with is having their bankruptcy case dismissed. And it can happen to anyone, even celebrities. For example, music star Lil Kim dealt with a possible bankruptcy dismissal this summer after a trustee rejected her Chapter 13 repayment plan.
A dismissal is bad because it means all collection activity may start again. All your debts are back in your court. Foreclosures, collection calls, repossessions, and lawsuits may all rev up again. If your bankruptcy case has been dismissed you need to make some decisions fast.
Consider why your case was dismissed.
Your bankruptcy case may have been dismissed for any of the following reasons.
- You failed to provide the appropriate paperwork.
- You filed for Chapter 7 and failed the Chapter 7 means test.
- You didnt complete the debtor education course.
- The court suspects you of committing bankruptcy fraud.
- You failed to pay your filing fees.
See also: 9 Risk Factors that Might Make a Creditor Challenge Your Bankruptcy and 4 Bankruptcy Pitfalls to Avoid.
Some of these problems can easily be fixed, some cannot. For example, if you failed to file the appropriate paperwork you may be able to simply correct the problem and refile. But if youre suspected of bankruptcy fraud your next step may need to be focusing on finding a lawyer for the impending criminal case.
The goal here would be to fix whatever caused the dismissal, refile, and achieve a successful discharge on the second try.
Can You Refile For Ch 13 After A Dismissal
Often times, you can refile for bankruptcy immediately after dismissal. That means going through the process again, hoping for a discharge. While declaring bankruptcy might offer debt relief, it does serious damage to your credit.
A ch 13 bankruptcy sinks your credit score by over 100 points & stays on for up to 10 years. Having poor credit affects your eligibility for qualifying for loans. The ones available often come with expensive high-interest rates. Luckily, you can start rebuilding your credit. The easiest way is w/help from a pro like Credit Glory.
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When Can Bk Be Dismissed
- Chapter 7 can be dismissed under the following circumstances.Voluntary dismissal: If you do not intend to go ahead with your BK case, you can request the court to have it dismissed. The judge will dismiss your case, as long as he thinks it does not affect your creditor’s ability to collect the debt from you.Inability to follow rules: If you fail to follow the BK rules, your case can be dismissed for the following reasons:
- You do not pay the fees and costs associated with BK.
- You cause unnecessary delay in your case.
- You do not file necessary paperwork and fail to provide the court with required information.
- You filed your case in bad faith
- You have filed Chapter 7 even though you can pay off most of your debts through Chapter 13.
- You live a luxurious life even after filing BK.
- Your Chapter 13 case can be dismissed under the following situations.
- You do not file a repayment plan within time.
- You fail to make timely payments.
- Your repayment plan is not confirmed or your request for additional time to file another plan is denied.
Abuse of Chapter 7: If you abuse the Federal laws regarding chapter 7, it can result in a dismissed bankruptcy under the following circumstances:
What Happens If Your Bankruptcy Case Is Dismissed
Should you stop making payments on your Chapter 11 or Chapter 13 payment plan, you are likely to lose your bankruptcy protection. The trustee will notify the court of your missed payments and your case could be dismissed. If this happens, your creditors have the ability to seek payment for the full amount of your debts and can even sue you.
Of course, if your financial situation has changed significantly and you are unable to make those payments, it is possible for you to file for Chapter 7 protection, at which time your debts will be dismissed.
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Why Are Bankruptcies Dismissed
Filing for bankruptcy is a complicated process with many steps, forms, rules, and criteria for eligibility. The stresses of declaring bankruptcy can contribute to easy mistakes. One single mistake with any aspect of the process can be grounds for dismissal, so there is a lot of room for error.
Also, because bankruptcy provides a much-desired relief, some candidates attempt to misrepresent their situation. This is grounds for a type of dismissal that has more serious consequences than dismissals related to honest mistakes.
Why Do Chapter 13 Cases Get Dismissed
There are several reasons why a Chapter 13 case can be dismissed. Some are the same as for Chapter 7 cases. Things like not paying the court filing fee, not properly preparing for and attending the meeting of creditors, and not filing all required bankruptcy forms. Other reasons why a Chapter 13 bankruptcy case may be dismissed are:
Failing to pay the Chapter 13 payments.
Failing to meet certain deadlines.
Failing to propose a Chapter 13 plan that complies with bankruptcy law.
Failing to submit the required documentation to the Chapter 13 trustee.
Failing to file tax returns every year not submitting a copy to the trustee.
As you can see, the reasons for a dismissed Chapter 13 usually involve the debtor failing to do something the debtor is required to do under the bankruptcy rules. However, sometimes, a dismissed Chapter 13 case is due to something beyond the debtorâs control.
For instance, if a debtor loses his or her job or becomes ill, the debtor may not have enough money to pay the Chapter 13 plan payments. If changing the plan payment or converting the case to a Chapter 7 case is not an option, there may be no choice but to let the Chapter 13 case be dismissed.
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Filing A Chapter 7 Case Without An Attorney
If youâre struggling to pay your debts, you might want to consider a Chapter 7 case before you file a Chapter 13 case. Depending on your financial situation, you might pass the Means Test for a Chapter 7 case. In a typical no-asset Chapter 7 case, you can eliminate your debts within four to six months after filing your bankruptcy petition with the bankruptcy court. For many filers, theyâre able to get rid of thousands of dollars in debt quickly without losing any of their property.
If this sounds like the debt solution you have been searching for, consider using Upsolveâs free filing tool. If you have questions or you are skeptical, watch video testimonials from our past users. You can hear from actual individuals who used our services to file a Chapter 7 case without an attorney to receive the debt relief they need.
If you need a fresh start but you canât afford to pay an attorney to help you file a Chapter 7 bankruptcy case, take our screener to see if you’re a fit for Upsolveâs free bankruptcy app. Upsolve gives individuals who cannot afford to hire a bankruptcy attorney the assistance they need to get out of debt. You can do this!
Check out the video below â¬ï¸ for more on what happens when a Chapter 13 case is dismissed!
How Is A Chapter 13 Case Different
By contrast, those filing bankruptcy under bankruptcy Chapter 13 are required to submit completed schedules and a Chapter 13 repayment plan. Like Chapter 7 filers, they are required to be forthcoming when submitting information and documents to the court and the trustee assigned to their case, attend their meeting of creditors, and appear at certain mandatory bankruptcy court appearances. Additionally, they must make their Chapter 13 plan payments on time or risk the dismissal of their case.
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Dedicated To Providing Superior Service Not Found Elsewhere
Morgan & Morgan attorneys can help settle your debts such as credit card debt, auto loans and mortgage debt. Contact us if you need assistance with baknruptcy or have any questions about the process. No problem is too big or too small for us to help.
Attorney Jason Braswell & Lisa LaCount are just wonderful…not one time have I call the office that I didnt get a chance to speak directly to Jason or Lisa, or receive an immediate return call/email with a response. Thanks to this attorney team, my mind and our finances are in order. – C.P.
Morgan & Morgan worked on disability benefits for my unemployed 50-year old brother who was homeless and suffering from autism/Aspergers syndrome. We all knew nothing and Mr. Morgan was a breath of fresh air.
My experience with Morgan & Morgan was exceptional!!! I was very well informed about their procedures and felt comfortable about going forth with my case. Everything was handled with importance. – C.J.
We were fully enlightened about our situation which helped us choose our best choice concerning a problem. We would recommend Mr Braswell to our friends. – H.A.
A very respectful law firm that has very good customer service which is job one in the human world. Thank you Morgan and Morgan of Athens, GA. – W.S.
Jason is the best lawyer ever. I appreciate everything he’s done in my case. I could never thank him enough.
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Contact A Michigan Bankruptcy Attorneyfor More Information
A bankruptcy lawyer can help you through your debt issues. First, get the legal advice you need. Every persons case is different. You want an attorney that is experienced in the local bankruptcy court for the area you reside.
Bruce law Firm has bankruptcy attorneys that can help. Our bankruptcy attorneys offer a free consultation. If you need to file bankruptcy call today.
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Aug What Happens To A Foreclosure If You File Bankruptcy
There are many posts in these pages and on Mortgage Law Network about the types of foreclosures and the fact that a bankruptcy filing can stop the process. But what happens then? Just because in most states a bankruptcy stops a foreclosure , it doesnt end it.
The foreclosure process, in spite of the bankruptcy often continues. When a bankruptcy is filed, however, the automatic a stay that is created will stop any further proceeding. The stay lasts until one of two things happens: the bankruptcy ends by discharge or dismissal, or the creditor gets the court to grant them relief from the stay to go forward.
There is a provision of the bankruptcy code ), however, that if the property is needed for an effective reorganization of the debtor in a chapter 13 bankruptcy, and the debtor is able to make normal monthly payments than the mortgage company cant foreclose. But the filing of a chapter 13 doesnt end the foreclosure process it merely stops it. The mortgage company, if notice of sale has already been filed, can appear at the time and place of sale and continue it to another date to see if the bankruptcy has been dismissed by then. And, unless you were present when the change in sale dates was announced, they dont have to tell you when or where the next sale is scheduled.
I guess the good news is that after a year, the mortgage company would have to send new notices of a sale if it wanted to go forward.
What Happens When You File For Bankruptcy
- Constance Brinkley-Badgett
Bankruptcy isnt something most of us want to consider, even when weve dug ourselves into a significant financial hole. But in some circumstances, bankruptcy can provide the financial protection and relief we need. Heres what you need to know when you decide to file for bankruptcy.
Perhaps the most difficult part of bankruptcy is determining whether its the best option for your financial situation. Talking to a financial professional like a credit counselor or a bankruptcy attorney can be a helpful if not necessary step in making that determination. More on that in a bit. First, lets review what happens when you file for bankruptcy protection:
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Filing A Chapter 7 Case
If a Chapter 13 plan goes south and they very often do there are options beyond getting pummeled by creditors and refiling under Chapter 13. Chapter 7 bankruptcy the simple liquidation plan mentioned at the top is a possibility.
Debtors who have not received a Chapter 7 bankruptcy discharge within the last eight years are eligible to convert from Chapter 13 to Chapter 7 at any time.
Conversion requires filing a motion with the court. The motion to begin the conversion happens automatically no court hearing is necessary. Consult your trustee for additional information about making the switch, including who should notify your creditors.
Customarily, forms filed for a Chapter 13 petition transfer neatly into a Chapter 7 case. But not always. Your court may mandate a fresh batch of forms, as well as a Statement of Intention . Additionally, the court imposes a small conversion fee .
Applying for a conversion is not always the same thing as qualifying. Depending on the bankruptcy court, petitioners may be required to pass a means test before qualifying for a Chapter 7 conversion.
Most likely, petitioners must explain why theyre seeking a conversion. Oftentimes, its the result of a significant change in the debtors financial status that makes the agreed-upon Chapter 13 repayment plan impossible to meet.
The bankruptcy path is tricky and errors can be punishing, debtors should strongly consider retaining legal counsel before tackling bankruptcy.
7 Minute Read
Dealing With Debt Collectors After Your Bankruptcy Was Dismissed
Dear Michael, I have not paid my cc since 12/2012. Unfortunately I hired a crook of an attorney who said he could file a chapter 11 to save my house and refinance from $240,000 to $114,000. I did not realize it but he was not able to file a chapter 11 and he filed a chapter 13 without telling me. He charged me $17,000.
I went to court to disgorge his fees. I lost but the Judge dismissed the bankruptcy in March 2013.
I owed about $48,000 in credit card debt.
So far I was contacted by Capitol Appreciation saying I owed a Discover card debt of $5,000. I sent a debt validation letter and they did not answer.
I just received a letter from Portfolio Recovery Associates who bought the debt from Pier One. Should I send a debt validation?
My question is how likely will all the creditors come after me after the fact the bankruptcy chapter 13 was filed May 2012 and dismissed March 2013. December of 2016 will be 4 years the statue of limitations for the credit collection to take me to court. The bankruptcy was filed in May 2012, but no payments were made no plan was filed. The Judge dismissed the bankruptcy March 2013 and did order the attorney pay me back $3,000 only.
So my question is would it be wise to send validation letters to any collection companies and see what happens?
Is the statue of limitation up in 2016 since no payments were made, and even though my bankruptcy was filed then dismissed?
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