What Can I Do If My Bankruptcy Case Is Dismissed?

Debtors can weigh their options after getting the court's dismissal order.

Once the bankruptcy court enters a dismissal order, the debtor's property is no longer protected from creditors. The creditors have the right to pursue payment for debts based on contractual terms and laws outside of bankruptcy. The legal options debtors choose to pursue depend on the status of the case, when the dismissal was granted and whether the debtor can fulfill the court requirements to continue the old case or begin a new bankruptcy case.

Review Court Paperwork

The bankruptcy court sends paperwork to the debtor regarding problems with the case before dismissing it. Usually the case is dismissed because the debtor failed to file documents with the court, did not make plan payments, failed to appear at a court hearing or did not comply with some other type of court order. Read the court paperwork and figure out if it is possible to supply the court with the information needed or complete the action required.

Vacate Dismissal

Debtors can file a motion to vacate the dismissal order. The Federal Rule of Bankruptcy Procedure 9023 requires the motion be filed with the court within 14 days after the dismissal was granted. Read the local court rules on the district's bankruptcy court website to confirm how soon the motion needs to be filed within the district. The bankruptcy court will close the case if the debtor does not meet this deadline. The motion should explain the circumstances which prevented the debtor from complying with the court order and request that the court reinstate the case.

Reopen Case

Filing a motion to reopen the case is an option if the deadline for vacating the dismissal passed and the case is closed. Typically, Chapter 7 cases get dismissed if the debtor did not file the certificate of financial management within 45 days after the meeting of creditors, as required under Federal Bankruptcy Procedure Rule 1007. The motion should advise the court that the financial management course was completed and the certificate is ready to be filed once the case is reopened. A Chapter 13 debtor's delinquent plan payments are grounds for involuntary case dismissal. The debtor needs to become current with his payments or request court approval to modify his payment plan if he wants to reopen the case.

File a New Bankruptcy Case

Debtors may choose to open a new case rather than attempting to reinstate the one that was previously dismissed. Filing a new case requires that the debtor pay the filing fee for opening a new case and start the entire bankruptcy process all over again. Debtors have to wait 180 days before starting a new case if they willfully refused to cooperate with court orders, according to 11 U.S.C. §109(g). The 180 day waiting period is also imposed if the debtor voluntarily dismissed his case after a creditor requested relief from the automatic stay. The bankruptcy court does not want the debtor to abuse the bankruptcy code by continually dismissing and filing new cases. The debtor may refile a bankruptcy case immediately if none of the provisions under section 109(g) apply or if the bankruptcy court dismissed the case without prejudice.

References

• Cornell University Law School: Federal Rules of Bankruptcy Procedure
• Cornell University Law School: §521 Debtor's Duties
• Cornell University Law School: §707 Dismissal of a Case or Conversion to a Case
• Cornell University Law School: §1307 Conversion or Dismissal
• Cornell University Law School: §109 Who May Be A Debtor