When and Why You Would Dismiss Your Bankruptcy Case

There are many reasons you may change your mind after filing your bankruptcy petition. For example, your financial situation may change or you don't want to risk losing your assets to bankruptcy. These issues may cause you to want to dismiss your bankruptcy case. However, doing so may not be easy.

Dismissing Your Chapter 7 Bankruptcy

If you file for Chapter 7 bankruptcy, you cannot voluntarily dismiss your case without approval from the bankruptcy court. If you want to dismiss your case, you will be afforded a hearing in front of the bankruptcy judge where you can explain why you would like to dismiss your petition. If you do not have many assets, your creditors or the bankruptcy trustee will likely not object to the dismissal, and the bankruptcy judge will have little problem granting your motion to dismiss. If you have many assets and you are behind on your payments, your bankruptcy trustee may object to your request for a dismissal. In addition, your bankruptcy trustee may even request that some of your assets be sold and distributed to your creditors.  

If the court will not dismiss your bankruptcy case but you still want to keep your assets, consider converting your Chapter 7 into a Chapter 13 bankruptcy. It is easy to convert your bankruptcy case; all you need to do is file an amended bankruptcy petition. In addition, you must file a Chapter 13 repayment plan, and have that plan approved by your bankruptcy trustee.  

Dismissing Your Chapter 13 Bankruptcy

If you would like to have your Chapter 13 bankruptcy petition dismissed, you will have more luck. In a Chapter 13 bankruptcy, petitioners have an absolute right to dismiss their case at any time without prejudice. However, the dismissal must be done in good faith. If the court finds that your Chapter 13 dismissal is in bad faith, the court has the authority to convert your case to a Chapter 7 bankruptcy case. In addition, if your case is the result of a conversion from a previous Chapter 7 filing, the court does not have to honor the request to dismiss your case.

Getting Legal Help

If you are thinking about dismissing your bankruptcy case, contact an experienced bankruptcy attorney in your state. An attorney will explain your options to you and help you decide whether you should dismiss the case.