Can I Dismiss My Chapter 7 Bankruptcy?

27 May Can I Dismiss My Chapter 7 Bankruptcy?

Sometimes a Chapter 7 bankruptcy becomes a bigger hassle than it was meant to be. The trustee wants to sell nonexempt assets or a creditor wants to file an adversary complaint objecting to the dischargeability of a debt and it just seems like it will never get resolved.

Unfortunately, you can’t just file a notice and dismiss the case and everything was as it was before you filed. Once the process has started, you have to get court permission to let you dismiss. Permission will only be granted if there’s a very good reason.

What happened when you started the bankruptcy is that a notice went out to all of your creditors, and they stopped pursuing the debt due to the automatic stay. Additionally, the trustee reviewed your case, started administering assets and spent time and money on the process. To simply enable a debtor to dismiss would be an injustice to the creditors that relied on the bankruptcy filing and to the trustee.

What you can do with a Chapter 7 bankruptcy, is convert it to a Chapter 13. That’s the kind of bankruptcy where you make plan payments and the law gives you an automatic right to convert (except in the absence of good faith). Find competent Chapter 13 counsel who can help you through this and you’ll live to see the light at the end of the couple, make a few payments and save your assets.

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Douglas Jacobs is a California bankruptcy attorney and partner in the Chico law firm of Jacobs, Anderson, Potter & Chaplin. Since 1988, Mr. Jacobs has taught Constitutional law and Debtor-Creditor/Bankruptcy law at the Cal Northern School of Law. He has served as Dean of Students since 1994. He is a frequent lecturer on the subject of consumer bankruptcy law, and has spoken at both state and national levels.
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