One of the worst outcomes any debtor could deal with is having their bankruptcy case dismissed. And it can happen to anyone, even celebrities. For example, music star Lil’ Kim dealt with a possible bankruptcy dismissal this summer after a trustee rejected her Chapter 13 repayment plan.
A dismissal is bad because it means all collection activity may start again. All your debts are back in your court. Foreclosures, collection calls, repossessions, and lawsuits may all rev up again. If your bankruptcy case has been dismissed you need to make some decisions fast.
Consider why your case was dismissed.
Your bankruptcy case may have been dismissed for any of the following reasons.
- You failed to provide the appropriate paperwork.
- You filed for Chapter 7 and failed the Chapter 7 means test.
- You didn’t complete the debtor education course.
- The court suspects you of committing bankruptcy fraud.
- You failed to pay your filing fees.
- You failed to attend the 341 meeting of creditors.
- You stopped making your Chapter 13 plan payments.
- The court feels you are not cooperating with the trustee.
Some of these problems can easily be fixed, some cannot. For example, if you failed to file the appropriate paperwork you may be able to simply correct the problem and refile. But if you’re suspected of bankruptcy fraud your next step may need to be focusing on finding a lawyer for the impending criminal case.
Note your lawyer should not have allowed some of this to ever happen. We would never let any of our clients miss vital paperwork or meetings for example.
As mentioned, refiling is sometimes an option. However, you need to be wary of becoming a serial bankruptcy filer. Not only does filing multiple bankruptcy cases fail to solve the problem, it’s also starting to serve as a red flag to courts who may see it as an indicator of bankruptcy fraud.
The goal here would be to fix whatever caused the dismissal, refile, and achieve a successful discharge on the second try.
Sometimes it is smarter to appeal the existing case. But you’ll have to move fast. You only have 14 days to get the appeal filed.
You can only file the appeal if you can make a convincing claim that the court was in error for dismissing the case. The reason could be a legal error or a dispute with the facts of the case which led to the appeal.
Deal with the new reality.
Sometimes you won’t have either of these options, and you’ll find yourself in the same place you started. Juggling a bunch of debts and being hounded by your creditors.
If this is the case you might just have to handle the consequences of your debts. It might be time to let the house go, give up the car, and commit to paying the debts that landed you in so much trouble.
This is the absolute worst outcome, and the one we help our clients avoid all the time.
Did you try to file bankruptcy on your own?
The number one reason we see bankruptcy cases getting dismissed is pro se filers who don’t know what they’re doing, and who don’t get much sympathy from judges who don’t approve of them. Many pro se filers believe they cannot afford an attorney, but end up learning they couldn’t afford not to have an attorney.
You should also be careful of legal “ghostwriters” who try to offer unbundled services rather than fully representing you in your bankruptcy case from start to finish.
And here’s the good news.
Here at Sadek and Cooper your initial consultation is free. We also offer fair payment plans to all our clients, because we don’t want your financial situation to keep you from getting financial relief. Thus, you absolutely can retain our services and get the help you need.
And if you are reading this post because you just got your case dismissed, you need to contact us right now. We’re ready to hear from you 24/7 because sometimes time really is of the essence.