Chapter 13 Bankruptcy Dismissed

Chapter 13 bankruptcy is sought to tide over the financial crisis and many seek relief under this clause against the foreclosure of their homes. Both the federal and the state laws have cited numerous clauses that are to be abided by the debtor if he wants to enjoy Chapter 13 bankruptcy. Failure to do so, results in Chapter 13 bankruptcy dismissal.

Dismissal can occur at the time of the filing of the petition to any day even after the receipt of the order for bankruptcy. Some of the causes are cited below:

-- The federal and the state laws demand the debtor to file numerous documents, schedules and forms at the time of the petition. Failure to perform the act leads to the dismissal.

-- Similarly, the form submission and its filling have to adhere to a strict procedure of compliance, and the payment of administrative and filing fee. Non-compliance in any of these measures lead to the Chapter 13 dismissal by the federal bankruptcy court.

-- The debtor’s presence is inevitable during the creditors’ meeting called up by the court. Failure to turn up in spite of reminders from the court culminates in the dismissal of the petition.

-- Where the court approves an order for Chapter 13 bankruptcy, the debtor is to transfer the agreed sum of money to the trustee every month for its distribution to the creditors. When a debtor fails to make the first monthly installment, he is provided with a fixed time frame, generally 21 days, to repay the missed installment along with the next due installment to the trustee. Failure to abide to this will place a dismissal on the continuity of the reorganization plan, leading to the Chapter 13 bankruptcy dismissal.

-- When a debtor moves to another state after the approval of Chapter 13 and makes a failure in monthly installments, then he is presented with an opportunity to file for Chapter 13 in the new city within the stipulated time frame or continue with the old repayment plan to prevent its dismissal.

Failure to abide to the clauses stipulated in Chapter 13 bankruptcy results in its dismissal resulting in the creditors resuming the lawsuits, foreclosures, garnishments, etc. for recovering their outstanding amounts.