Chapter 13 Bankruptcy Dismissal

The failure to adhere to the rules cited by the federal and the state laws in relation to Chapter 13 bankruptcy rules result in the bankruptcy dismissal. A debtor has to remain highly vigilant to avoid a dismissal as it gets reflected in his credit report for seven to ten years. Moreover, the law prevents you from re-filing your case after dismissal, if your previous Chapter 13 case was dismissed within the last 180 days on account of the fraudulent filing, failure to adhere to the court order or where a creditor sought relief from automatic stay.

The reasons for the Chapter 13 bankruptcy dismissal can be numerous. Dismissal can occur before or after the Court’s sanction for Chapter 13. The federal and the state rules demand the petitioner to follow a certain format in filing with the right documents and schedules filled and submitted in the desired manner. Failure to observe it will result in the dismissal of the petition by the court.

Similarly, the debtor is to make the payment of the filing fees and the administrative costs along with the petition. The Court grants the liberty to make installment payments under certain circumstances. Failure to make the payment of the costs within the stipulated time frame forces the court to dismiss the case.

When the debtor is granted with the Chapter 13 bankruptcy, then he is to make monthly payments to the trustee for the distribution of the same to the creditors as stated by the terms of the repayment plan approved by the court. When a debtor makes his first failure he is provided with 21 days to repay the missed installment along with the next installment due. The inability from the part of the debtor to conduct this act leads to Chapter 13 dismissal.

When the debtor moves from one state to another, he has the option to continue his existing Chapter 13 plan or apply for a fresh one in the new state provided he satisfies the clauses stated by the state in question. Failure to do so will result in the dismissal of the Chapter 13. Dismissal of Chapter 13 takes away the automatic stay providing the opportunity to the creditors to move with the collection procedures including foreclosures, repossessions, garnishments, and lawsuits.