What Happens When Chapter 13 Is Dismissed?

Chapter 13 bankruptcy allows you to develop a plan to repay all or part of your debt. If you have proceeded with Chapter 13 but want to pursue other options or to protect assets, you can file a motion to have the bankruptcy dismissed. A court also can dismiss protection if it finds that the filer is not making payments or meeting other obligations of the bankruptcy settlement.

Filing a motion

Give the court a valid reason for filing a motion to dismiss Chapter 13. If you are trying to hide or protect assets from creditors, the motion will be denied.

Other options

You can file a voluntary dismissal if you and your creditor have found a justifiable reason to pursue other options and you can prove that you will repay the debt.

Court dismissal

If the court agrees to dismiss the bankruptcy, the original stipulations of your financial rights will be restored. This means you have the right to use other methods to repay your debts, but it also means that your creditors can take action, such as filing a lawsuit.

Preventing court dismissal

You have the right to talk to the court about a dismissal before a motion is filed. If you explain your situation, the court might lower your payments or grant you an extension.

Mortgages

If your mortgage was delinquent at the time Chapter 13 was filed, the lender has the right to foreclose on the property if the bankruptcy is dismissed.

References

• Dismissal defined
• What happens when a bankruptcy is dismissed
• What happens if my chapter 13 is dismissed