Can I File for Chapter 13 If My Chapter Seven Is Dismissed?

By Timothy Mucciante

You can file a Chapter 13 bankruptcy after your Chapter 7 is dismissed, but it cannot be done right away. You may also try to reinstate your Chapter 7 case. If your Chapter 7 is reinstated, the trustee sells your eligible assets and makes payments to your creditors. Your credit obligations are discharged and you get a fresh start. By contrast, in a Chapter 13, you are not relieved of your credit obligations until you make all the payments required by your plan, which may take years.

Bankruptcies Not Created Equal: Chapters 7 vs. 13

When you file a Chapter 13 or Chapter 7 bankruptcy petition, the court issues an automatic stay. This stay prohibits your creditors from attempting to collect any debt owed to them. A Chapter 7 bankruptcy causes your assets to be liquidated, with the proceeds going to pay your creditors. Once this is done, you are discharged from any further obligation to those creditors. Filing a Chapter 13 bankruptcy gives you time to work out a reasonable repayment plan with your creditors. You only get a discharge in a Chapter 13 bankruptcy after you complete the repayment plan.

A Dismissal Is Not a Discharge

In a Chapter 7 case, a bankruptcy discharge releases you from having to pay anything to your creditors. A Chapter 13 discharge shows that you complied with the terms of your payment plan. Dismissals are covered by the Federal Rules of Bankruptcy Procedure. A bankruptcy case may be administratively dismissed if a credit counseling course certificate is not filed, the filing fee is not paid, or the required schedules and financial information are not filed. A Chapter 13 bankruptcy may also be dismissed if agreed payments to creditors are not made.

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Reinstating Your Chapter 7 Case

To reinstate a dismissed Chapter 7 case, you must know the reason for the dismissal. Ordinarily, this information will be in the dismissal order received from the court. You may also go to the Bankruptcy Court Clerk's Office and look at your bankruptcy file. A Motion to Reconsider is the only way for your case to be reinstated. Many dismissals are entered when required documents or schedules are not filed or fees are not paid. The Motion to Reconsider should include the documents that were not filed or the fee that was not paid.

Filing a Chapter 13 Bankruptcy

A second bankruptcy under Chapter 13 cannot be filed until 180 days after your Chapter 7 petition was dismissed. Even though your Chapter 7 bankruptcy is dismissed, it still stays on your credit report for 10 years. Before you can file a Chapter 13 bankruptcy, you will again need to obtain a certificate that you completed credit counseling within 180 days of the Chapter 13 filing. Because of this time limit, you may not use the credit counseling certificate from your Chapter 7 bankruptcy.

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What Happens When Chapter 13 Is Dismissed?


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Will I Receive Notice to Vacate After a Bankruptcy Is Discharged?

Your landlord may not automatically evict you from your apartment just because you sought bankruptcy protection from your creditors. Your ability to keep your apartment depends on the type of bankruptcy that you file, the status of your rent payments to your landlord, and whether you keep your lease. Bankruptcy, however, does not prevent your landlord from removing you from the rental unit if eviction procedures were initiated before you filed your bankruptcy petition.

How to Reinstate a Dismissed Bankruptcy

At the conclusion of your bankruptcy case, you typically will receive a bankruptcy discharge. A bankruptcy discharge means that all of the debts that are included in your bankruptcy case are erased and your creditors cannot pursue collection action against you to enforce the debts, like filing a civil lawsuit. During the bankruptcy case, you can ask the court to dismiss your case, or the court may dismiss your case on its own, and you will not receive a bankruptcy discharge. However, you can ask the bankruptcy court to reinstate your bankruptcy if it is dismissed by the court.

Can You Stop a Chapter 13 Dismissal for Late Payments to the Trustee?

Under a Chapter 13 repayment plan, you make regular payments to the bankruptcy trustee over three to five years. This enables you to satisfy your creditors over time and, in most cases, keep everything you own. Missing payments or making late payments can result in the dismissal of your case and loss of bankruptcy court protection. If circumstances cause you to fall behind or make your payments late, you can take steps to make it less likely that your case will be dismissed.

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