If your Chapter 13 plan was dismissed, you will need to know what this means and what comes next. Having your bankruptcy plan dismissed can come with severe repercussions, and you may need to look into alternative debt-relief options.
At Grady BK, PLLC, our goal is to help our Central NY and Watertown clients navigate the bankruptcy process with confidence. We understand how complicated bankruptcy can be, which is why we provide a personalized approach and treat every client like they are our only client. We can help you navigate Chapter 13 as well as find the best alternative debt-relief option if your Chapter 13 is dismissed. In this article, we will be discussing what is a dismissed Chapter 13 plan and what it entails.
What Happens if Chapter 13 is Dismissed?
You may be wondering what happens if your Chapter 13 gets dismissed after it has been approved. This occurs when the bankruptcy court declares that your Chapter 13 case is over before the repayment plan has been completed and wipes out your debts. Here are a few reasons why this may occur for Central New York or Watertown residents:
- You missed your monthly payments.
- You didn’t attend a mandatory court date.
- You didn’t file the required bankruptcy forms.
- You didn’t pay the necessary court filing fee.
- You failed to attend the 341 meeting of creditors.
When your Chapter 13 bankruptcy case is dismissed, you will lose the protection of the automatic stay, which prohibits your creditors from pursuing any collection efforts. Because of this, you will be left vulnerable to creditors who may garnish your wages, start debt collection lawsuits, or even begin a foreclosure on your home.
Another drawback to having your Chapter 13 dismissed is that this could show up on your credit report, resulting in a lower credit score. This can also make it more difficult if you wish to file for bankruptcy again in the future, depending on why the case was dismissed.
Something to keep in mind is that there is also voluntary dismissal, which allows you to dismiss your own Chapter 13 plan. Although rare, there are situations where your finances may have changed, and you no longer need a Chapter 13 plan or you can no longer afford the monthly payments.
Central NY Chapter 13 Dismissed, Now What?
If your Chapter 13 is dismissed, you will need to decide what to do next when it comes to managing your debt. Before you decide what to do next, you should consider hiring a Central New York bankruptcy attorney. A bankruptcy attorney can help you decide which option is the best fit for your situation, whether that be to refile for Chapter 13 or look into other debt-relief options.
Here are some options to consider after a Chapter 13 plan dismissal.
Refile For Bankruptcy
The good news is that you can refile if your Chapter 13 is dismissed as long as you still meet the qualifications. Most people are able to file for Chapter 13 immediately after their case is dismissed, but this may be dependent on the reason for the dismissal. Depending on the circumstances, you may have to wait for 180 days before re-filing or you may be barred from re-filing at all.
It’s also important to understand that when you file, it is a possibility that your automatic stay may be limited, which would reduce the protection you have from your creditors. It is also possible that the bankruptcy court may not apply an automatic stay to your plan at all, which could result in you facing collection efforts while your case is pending.
Modify Your Repayment Plan
If you are struggling to make the monthly payments for your Chapter 13 bankruptcy plan, you may be able to have it modified. Modifying the details of your repayment plan can help you avoid having your Chapter 13 plan dismissed if you aren’t able to make the full monthly payments.
To have your plan modified, you will need to file a motion and attend a hearing date to explain why you want your plan modified. In most cases, if you have a good reason for requesting this, the court will modify your plan so that you are able to keep up with your monthly payments.
File For Chapter 7
If your Chapter 13 plan is dismissed, you could file for Chapter 7 if you meet the income requirements set by the means test. You may choose to do this if your financial situation has changed, making you eligible for Chapter 7 or if you are unable to refile for Chapter 13 immediately after a dismissal.
However, bankruptcy courts may create specific restrictions around your ability to file for bankruptcy if you have not complied with court orders in the past or have filed multiple bankruptcy cases in a short amount of time.
Debt Settlement
If none of the above options are a good fit for your situation, you may also be able to take advantage of debt settlement. This is when you negotiate with your creditors to create a payment schedule. A debt settlement schedule works much like a Chapter 13 repayment plan, except it may not give you as much flexibility or the same amount of protection.
Central New York’s Top Compassionate Bankruptcy Attorney
If your Chapter 13 was dismissed, you may be wondering what to do next. At Grady BK, PLLC, we will help you throughout the bankruptcy process, whether you are filing or navigating a dismissed Chapter 13 plan. Having a New York attorney on your side can help you navigate this process with ease so that you can choose the best course of action for your situation.
At Grady BK, PLLC, we help clients in Central New York and Watertown navigate the complexities of Chapter 13 bankruptcy. We will tailor our services to your individual situation so that you can proceed with confidence toward your financial goals.
Contact us today at 315-299-9005 to discuss your financial situation with a bankruptcy attorney in Central New York. Our team at Grady BK, PLLC, is here to provide you with the legal assistance you need as you navigate what to do if your Chapter 13 is dismissed.
