Chapter 13 dismissal · Beverly Hills
Why Chapter 13 Cases Get Dismissed and How to Avoid It
Chapter 13 cases get dismissed most often for missed plan payments, missed mortgage payments and missing tax returns or documents. Most of these problems can be fixed if you act early. If you received a notice from the trustee, call (310) 362-9071 today.
- The trustee usually files a motion to dismiss before the court acts
- Dismissal ends the automatic stay and brings your debts back
- Refiling within a year limits the stay in the new case
At a glance
The most common reasons for dismissal
Most dismissals in Chapter 13 bankruptcy come from a short list of problems. Knowing them is the first step to avoiding them.
- Missed plan payments. This is the top reason. Even one or two missed payments can lead to a motion to dismiss.
- Missed mortgage payments. If your plan says you pay the mortgage directly, falling behind again can lead the lender to ask for relief from the stay or the trustee to seek dismissal.
- Unfiled tax returns. You must file all tax returns for the past four years before the meeting of creditors. During the case, you must keep filing on time.
- Missing documents. The trustee needs pay stubs, tax returns, bank statements and proof of identity. Late documents delay confirmation.
- Missing the meeting of creditors. You must attend the 341 meeting of creditors. In this region, these meetings are held by Zoom for cases filed on or after May 1, 2024.
- A plan that cannot be confirmed. If the plan does not pay what the law requires, and it is not fixed, the court can dismiss.
- Falling behind on support. Child support or alimony that comes due after filing must be paid on time.
- Missing insurance. If the plan pays a car lender, you must keep the car insured.
What happens when the trustee files a motion to dismiss
A motion to dismiss is a warning, not the end. The trustee files it and sends you notice. The notice sets a deadline to respond and a hearing date.
Your options usually include:
- Cure the default. Pay the missed amount before the hearing.
- Agree to a catch-up plan. The trustee may agree to let you pay the missed amount over a few months.
- Modify the plan. If your income dropped, a plan modification may lower your payment going forward.
- Convert to Chapter 7. If you qualify, converting to Chapter 7 may be better than dismissal.
- Ask for a hardship discharge. In narrow cases, a hardship discharge may apply.
Do not ignore the notice. If you do nothing, the court will likely grant the motion.
What dismissal means for you
- The automatic stay ends. Creditors can restart foreclosure, repossession, garnishment and lawsuits.
- Your debts come back. You get no discharge. Interest and fees that were paused may be added back.
- Payments made stay paid. Money the trustee already paid to creditors is not returned. Funds the trustee is holding may go back to you, after certain costs.
- Refiling has limits. If you file again within one year, the automatic stay ends after 30 days unless the court extends it. If two cases were dismissed in the past year, the stay does not start at all unless the court orders it.
- A possible 180-day bar. If the case was dismissed for willfully failing to obey court orders, or you dismissed it after a creditor asked for stay relief, you may have to wait 180 days to refile.
Refiling is still possible in many cases. See refiling a dismissed bankruptcy.
How to avoid dismissal
- Use payroll deduction if you can. The payment comes out before you see it.
- Build a small cushion. Set aside money each month for car repairs and other surprises.
- Pay your mortgage first. If you pay the mortgage directly, treat it like the plan payment.
- File taxes on time. Every year, for the whole case.
- Read all mail from the trustee. Deadlines are short.
- Call us early. A change in income is easier to handle before you miss a payment than after.
What it costs
- Chapter 7: flat attorney fee from $1,200, plus the $338 court filing fee
- Chapter 13: attorney fee quoted in writing, and part of it can be paid through the plan
- Payment plans are available, and the first consultation is free
More on Chapter 13 bankruptcy
- Chapter 13 bankruptcy in Beverly Hills
- Chapter 13 Eligibility and Debt Limits
- How a Chapter 13 Plan Payment Is Calculated
- Car Loan Cramdown and the 910-Day Rule
- Changing a Chapter 13 Plan After Filing
- Why Chapter 13 Cases Get Dismissed and How to Avoid It
- Chapter 13 Hardship Discharge
- The Co-Debtor Stay: Protecting a Co-Signer
- Mortgage arrears cure plan
- Second mortgage lien stripping in Chapter 13
- Converting Chapter 13 to Chapter 7
Chapter 13 dismissal questions
How many missed payments before Chapter 13 is dismissed?
There is no fixed number of missed payments before Chapter 13 is dismissed. The trustee can file a motion once you fall behind. Some trustees act after one missed payment, others wait longer. Do not count on extra time.
Can I stop a Chapter 13 dismissal?
Yes, you can often stop a Chapter 13 dismissal by curing the missed payments, agreeing to a catch-up plan or modifying the plan before the hearing. Act as soon as you get the notice.
What happens to my house if my Chapter 13 is dismissed?
If your Chapter 13 is dismissed, the lender can restart foreclosure on your house. Any missed amount the plan had not yet paid is due again under the loan.
Can I file again after a Chapter 13 dismissal?
Yes, you can usually file again after a Chapter 13 dismissal. The automatic stay may last only 30 days unless the court extends it, and some dismissals carry a 180-day wait.
Does a dismissal show on my credit report?
Yes, a dismissed bankruptcy case can show on your credit report even though you got no discharge. That is one more reason to fix problems early.
Free consultation
Got a motion to dismiss
Call (310) 362-9071 or send the form. Bring the trustee's notice and we will go over your options right away.
Law Offices of John Asuncion9454 Wilshire Blvd., Penthouse Floor
Beverly Hills, CA 90212
(310) 362-9071
Monday to Friday, 9 a.m. to 6 p.m.