There are more ways for a chapter 13 New York bankruptcy case to end than to begin. Hopefully it ends with a discharge or a completed repayment plan, but some endings aren’t so fortunate. In particular, a chapter 13 case can end in dismissal for any of eleven reasons according to the Bankruptcy Code (11 U.S.C. §1307(c)). Knowing what they are can help you understand how likely they are to occur or what you can do to avoid them. The Bankruptcy Code allows the trustee or a party in interest (usually a creditor) to move the bankruptcy court to dismiss the case. Here are the reasons:
(1) Unreasonable delay by the debtor
(2) Nonpayment of required fees or charges by the debtor
(3) Failure of the debtor to file a timely repayment plan
(4) Failure of the debtor to commence making timely payments on the repayment plan
(5) Denial of confirmation of a debtor’s repayment plan and denial of a request for additional time for filing another plan or a modification to the original plan
(6) Material default by the debtor over a term in a confirmed repayment plan
(7) Revocation of the order of confirmation of a repayment plan and denial of a confirmation of a modified plan
(8) Termination of a confirmed plan because a condition other than completion is met
(9) & (10) Failure of the debtor to file a list of creditors and mandatory bankruptcy schedules listed in § 521(a)(1)-(2) of the Bankruptcy Code in time (only the trustee can move the bankruptcy court to dismiss a chapter 13 case under these circumstances)
(11) Failure of the debtor to pay a domestic support obligation that is payable after the petition is filed
These reasons can also be used to convert a case to chapter 7 if the debtor converted the case into chapter 13 earlier. Otherwise, conversion can only occur with the debtor’s consent. The debtor has an absolute right to dismiss the case at any time unless it was converted before. However, upon dismissal the automatic stay is lifted and creditors can pursue the debtor for any unpaid debts.
All of these reasons for a dismissal are avoidable just by simple diligence. It’s not difficult to avoid an “unreasonable delay” or make a timely support payment after the petition is filed, for example. Knowing these potential pitfalls, however, can help you avoid losing a chapter 13 case needlessly. As always, though, hiring an experienced New York bankruptcy lawyer will help you keep your chapter 13 case on track.
This is particularly true right now. Chapter 13 debtors who can make the case that they’ve fallen behind because of Covid-related financial issues can, for the next few months, add 2 years to their repayment plans, completing the repayment in seven years, rather than the statutory 5 year maximum.
For answers to more questions about bankruptcy, the automatic stay, effective strategies for dealing with foreclosure, and protecting your assets in bankruptcy please feel free to contact experienced Chapter 13 Bankruptcy Lawyer Brooklyn NY Bruce Weiner for a free initial consultation.
