Filing Personal Bankruptcy: What You Should do if Your Case is Pending Dismissal
Filing personal bankruptcy under chapter 13 means you will be expected to pay back your debt via a payment plan set up by the court. If you fall behind on your payments, though, your trustee has the option of asking for a dismissal of your case. What do you do if this happens? Is there any way you can keep your personal bankruptcy case open and get back on track? Here are some answers that may help you when you are filing personal bankruptcy.
A Motion to Dismiss During Your Personal Bankruptcy
If you receive a “Motion to Dismiss” from your bankruptcy trustee, there could be a couple of reasons for it.
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- You fell behind on your personal bankruptcy payments because you lost your job, fell ill, or had an emergency. The trustee will be monitoring your payment plan, usually with the help of a computer, and will be able to tell if you have not made your payment for the last few months.
- Your tax claims, or any other type of claim, came in and was more than expected. These claims mean you owe more money than originally thought and your payment plan would have to be extended more than 60 months in order to compensate for the added debt. Since this is not allowed when filing personal bankruptcy under chapter 13, your case could easily be dismissed.
- You changed jobs, and a new payroll deduction has not yet been filed. This means the money that is supposed to be deducted from your paycheck and sent in to the trustee for payments on your personal bankruptcy has not been.
When you first receive a motion to dismiss from the trustee, you should contact your lawyer and see what the reason for the dismissal is. Your lawyer will most likely have a few ideas in mind to help you avoid a dismissal and keep your bankruptcy case open.
Filing Personal Bankruptcy: What to do with a Motion to Dismiss
The good news is, many trustees are not heartless. They are usually willing to work with you as long as you are willing to work with them. Typically, they will ask that you pay 25% to 50% of the debt you owe because of falling behind or due to claims and will allow the rest to be added to your payment plan.
If the trustee agrees to this solution, you will most likely have to agree to strict compliance of the new payment plan. This means you only get one chance. If you don’t pay again, the trustee will not be so lenient.
Should the trustee reject a down payment and additional monthly payment on the debt, your lawyer may have to request a hearing with the judge you saw when you were filing personal bankruptcy. The judge will then determine whether you will be able to make your payment on time and decide if your chapter 13 bankruptcy case should be dismissed or not.
If you receive a motion to dismiss after filing personal bankruptcy, make sure you contact your lawyer and work with the trustee. A little bit of communication may go a long way in helping to save your chapter 13 bankruptcy.
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