Sometimes, debts get out of a debtor’s control, making them hard to pay and manage. Bankruptcy gives them an option to remove some debts by liquidation through Chapter 7. If a debtor wants to pay their debt and keep assets, Chapter 13 allows them to use a payment plan approved by the court. However, certain actions may prevent them from getting discharged.
What dismissal means
In Chapter 13, debtors are required to follow some criteria to get a discharge. If they fail to meet the criteria, their case may be dismissed. The automatic stay that protects debtors from collection attempts or foreclosure gets lifted. Creditors who halted seizing of assets or foreclosure can continue with the procedure.
Common reasons for dismissal
Chapter 13 requires debtors to devise a payment plan they submit to the court for approval. They commonly have 14 days after filing to submit the plan, or they risk getting a dismissal. If the debtor misses a payment, the trustee commonly files a motion to dismiss with the court. Debtors with a valid reason to miss a payment could get a chance to challenge the motion.
Under Chapter 13, debtors must fill out a petition and several forms listing all their earnings. The documents commonly include pay stubs, bank statements, and past tax returns, and the debtor should be truthful. Filers must complete debtor education required by bankruptcy law. If the debtor doesn’t file the certification after each course, the case could get dismissed. They must also attend a 341 meeting of creditors, which allows the creditors to ask questions.
Chapter 13 bankruptcy case dismissal commonly occurs when debtors try to represent themselves, and bankruptcy law is complex. To reduce the risk of dismissal, a debtor might seek an attorney’s advice.