Motion to Vacate Bankruptcy Case Dismissal

What You Can Do if a Bankruptcy is Dismissed

When a debtor files a bankruptcy petition and does not show up for the 341 Hearing or submit required information to the trustee, the court may dismiss the case.

When a court dismisses a case, the debtor may try to bring back the case with a Motion to Vacate Dismissal because if s/he had to file a new case s/he would need to pay court costs again.  In a Motion to Vacate Dismissal, the debtor gives excuses for not following court rules or moving the case along.

For example, the debtor's attorney became suddenly ill, preventing the debtor from filing necessary documents to the court.  When a debtor files a motion, the court sets the matter for hearing, but before the day of the hearing, the judge may issue a Tentative Ruling.  The hearing is meant to give people due process so if a person does not like the Tentative Ruling the person has to show up in court to argue.  The court does not like it if the person does not have any argument beyond what is in the court filings because the Tentative Ruling is meant to save time on the day of the hearing.  The judge does not like wasting time when there are other cases scheduled.  The court adopts the Tentative Ruling if there is no opposition.

A judge may deny a Motion to Vacate Dismissal according to Bankruptcy Code Section 521(i)(1), which mandates dismissal when required documents are not filed within 45 days of a petition filing.  Under this Bankruptcy Code Section, dismissal is automatic, and a court may not set aside the dismissal, unless, according to Warren v. Wirum, 568 F.3d 1113 (9th Cir. 2009), the trustee sought relief to dismiss the case for missing debtor information before expiration of a 90 days waiting period from petition filing.

When a debtor is not able to vacate a bankruptcy dismissal, the court lifts the automatic stay.  The debtor may file a new bankruptcy case, but the court may ask the attorney who worked on the first filing to disgorge fees so the debtor can find a new attorney, or if the debtor stays with the same attorney, the court may ask the attorney to file the new case without charge.

Bankruptcy motions may require strategic legal argument, requiring the assistance of an experienced bankruptcy attorney.