Free Consultation
The office is open as per the NYS Covid-19 guidelines. We are now doing both in-person and telephone consultations. Please call the office at 718-855-6840 to schedule a time to speak with one of our experienced bankruptcy attorneys.

When Is It Possible to Withdraw and Refile in New York Bankruptcy?

Filing bankruptcy in New York is a decision that shouldn’t be made lightly. That’s common sense. Problems can arise though, particularly when debtors make mistakes in their petitions that might result in them losing otherwise exempt property to the Trustee to be resold to creditors. The question then becomes, can debtors withdraw their bankruptcy petitions if a problem arises, or are they stuck? The answer depends on the chapter they file in.

Once a Chapter 7 bankruptcy is filed, the debtor can’t voluntarily withdraw his or her petition. Amending the petition might be an option, but once it’s filed, it’s filed.

Chapter 13, however, is a different story, which is why there are some situations in which it’s a more flexible chapter to use. If a petitioner has an asset that the Trustee believes wasn’t properly exempted, or the debtor doesn’t know how the bankruptcy judge will rule on whether the asset actually is exempt, or even if the debtor chose to use state exemptions rather than federal or vice versa, the Chapter 13 debtor has a powerful option to deploy: voluntary dismissal.

To effect this, the debtor need only file the appropriate motion, and that’s it. Although, there are consequences. For instance, once the petition is withdrawn, the automatic stay is lifted, so any pending collections or foreclosures can resume. On the other hand, there is some freedom to act after withdrawing. Debtors can decide to resume payment on some debts and possibly refile later. Alternatively, they can ensure that a piece of property they thought was exempt or sold was properly exempt or sold. An even more beneficial option is to file a new petition in Chapter 7, which can help in circumstances in which a Chapter 13 debtor loses his or her income necessary to complete the repayment plan after already withdrawing the petition but before refiling. One caveat, though, is that petitioners who refile within one year of a withdrawn petition only benefit from a 30-day automatic stay, but this time limit can be extended by filing a motion with the bankruptcy court.

Bankruptcy requires sound knowledge of how the code works, and skilled legal counsel can help debtors steer through it safely. It’s also important to be adaptable to ensure that mistakes that can be corrected are.

For 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 Brooklyn Bankruptcy Law Firm Bruce Weiner for a free initial consultation.

 

Rosenberg, Musso & Weiner, L.L.P
26 Court St # 2211
Brooklyn, NY 11242, USA
718-855-6840
http://nybankruptcy.net/

Recent Posts

Beware Grace Periods, Debtors

Too often, debtors see grace periods offered by lenders as free benefits. “Grace” makes it sound so innocent. However, debtors who routinely rely on grace periods when making payments will find themselves facing financial difficulties that might lead to bankruptcy. The reason is that although creditors offer grace periods to debtors, they also use them

Read More »

Bankruptcy May Not Rescue You From Vicious Personal Disputes

Bankruptcy is a technical process that assumes everyone working within it is mostly rational. To the extent that it expects parties to deviate from irrational behavior, the Bankruptcy Code and its accompanying rules include incentives to keep parties in line. Creditors are usually large and impersonal, and they rarely care if their debtors file bankruptcy.

Read More »

Non-Lawyers’ Explanations of Bankruptcy May Be Wrong

Do you have financial problems? Do you tend to ask your friends for advice? Is one of your friends an experienced New York bankruptcy lawyer who will explain the process for you? Are your friends otherwise knowledgeable people? The answer to these questions may be, “Yes but you don’t know it.” Although many bankruptcy lawyers

Read More »

6 Steps to Take Before Filing Bankruptcy

Leaving your case to an experienced New York bankruptcy lawyer is not the only step on the to-do list before filing bankruptcy. There are many things debtors should do (and not do) before they file, and the more organized and mindful debtors are, the easier the process will be and the more effective the result.

Read More »

Social Security Number Not Necessary for Bankruptcy

A question that’s commonly asked about New York bankruptcy is whether a debtor needs a Social Security number to file. Debtors ask because they sometimes run across the bankruptcy form title, “Your Statement About Your Social Security Numbers” (B 121), which asks debtors to list their current and prior Social Security numbers. The new bankruptcy

Read More »

How Can a Debtor (or Creditor) Get a New Trustee?

The trustee in a New York bankruptcy case is usually not the debtor’s ally. His or her purpose is mainly to administer the bankruptcy estate or ensure the debtor’s repayment plan goes according to plan. Trustees pursue preference payments, fraudulent conveyances, and other malfeasance committed by debtors. They frequently initiate adversary proceedings against debtors. In

Read More »
Scroll to Top