What are some common reasons a Chapter 13 case gets dismissed?

A chapter 13 dismissed means that you are no longer going through the legal process to either eliminate or pay your debts. There are many common reasons for a chapter 13 dismissal. For instance, if you don’t obtain pre-bankruptcy credit counseling within a 180 days of filing your bankruptcy petition, it’s automatically dismissed.

A major reason why chapter 13 bankruptcy cases are dismissed is for non-payment. With chapter 13 bankruptcy, you have to pay creditors and the bankruptcy trustee. Let’s say you have creditors such as a mortgage lender and you’re trying to save your home from foreclosure. You must keep those payments currents. In addition, you have to make monthly payments to the bankruptcy trustee. When you consecutively miss these payments either the creditors or bankruptcy trustee can file a motion to lift the stay. In addition, the trustee can also file a motion to dismiss you chapter 13 bankruptcy case. You don’t have to miss these payments together to have the case dismissed. For instance, if you make your mortgage payments, but not the chapter 13 payments, then your case can be dismissed.

Other common reasons for a chapter 13 dismissal is if you were caught trying to hide assets away from the U.S. Bankruptcy Courts or filed the wrong bankruptcy chapter. To find out all the reasons a chapter 13 is dismissed, talk with a lawyer. The lawyer will not only tell you the reasons, but try to prevent them.