21 Feb How Do You Know if Your Chapter 13 is Dismissed and Is there Anything You Can Do?
As you know, Chapter 13 requires on-going payments to the trustee. What happens if you get laid off from work? Is your case dismissed automatically? How do you find out?
Because your bankruptcy is part of a legal process, very little will happen without notice being given to you. If you fall behind in a Chapter 13, you will receive warning that your case is about to be dismissed.
The most common type of notice is called a Trustee Motion to Dismiss. This is a formal Motion by the Trustee asking the Court to dismiss your case, but giving you and your lawyer an opportunity to be heard by the judge. Usually hearings on Trustee Motions to Dismiss will be held in 20 to 30 days, so you will have time to come up with some money or otherwise negotiate a settlement with your Trustee.
In the Northern District of Georgia, where I practice, there is a second procedure that sometimes applies that will give you less time to react. Instead of filing a Motion to Dismiss, the trustee files a Notice of Default pursuant to an existing Court Order that will result in an automatic dismissal without a hearing. This expedited procedure only applies if there is already an Order in place giving the trustee the right to forego a Motion to Dismiss. In the Northern District of Georgia, new cases (those less than 6 months old) are subject to this automatic dismissal pursuant to a standing Order that covers new cases. You might also be subject to expedited dismissal if you have previously defaulted and entered into a “strict compliance” Consent Order on the trustee motion to dismiss. Expedited dismissal may also apply if the order of confirmation of your Chapter 13 case provides for dismissal without notice and hearing.
If you are not sure of your options regarding dismissal and possibly curing a default with the trustee, you should consult with your lawyer. For further reading, please note that I recently answered a specific question about Chapter 13 dismissals on my Atlanta Bankruptcy blog.
Jonathan Ginsberg, Esq.
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