August 23, 2017

What Happens if my Chapter 13 Case is Dismissed?

Earlier this week, I wrote a post entitled Should I Oppose the Chapter 13 Trustee’s Motion to Dismiss.  In that post I spoke about the relatively common scenario whereby a Chapter 13 debtor will fall behind on payments to the trustee or an unexpected claim will cause the plan to run longer than 60 months.  In such a case, the trustee will file a motion to dismiss and the debtor and counsel will have an opportunity to propose a cure to the delinquency.  Usually this cure takes the form of a lump sum payment immediately with the remaining delinquency paid to the trustee over time.

What happens if the proposed cure is not feasible for the debtor?  In such a case, the judge would sustain the trustee’s motion to dismiss or the debtor would not oppose the motion.  Either way, the debtor’s Chapter 13 case will be dismissed.

When a Chapter 13 case is dismissed, creditors can immediately pursue all non-bankruptcy alternatives.  If there is a home and mortgage delinquency involved, the mortgage lender can start foreclosure proceedings.  If there is a car payment involved, the car lender can immediately start the repossession process.  Credit card lenders can restart collection efforts including calls and letters.

More importantly creditor claims go back to their pre-bankruptcy status.  If, for example your Chapter 13 plan called for a payment amounting to  5 cents on the dollar to unsecured creditors, a dismissal would give those unsecured creditors the right to pursue 100% of balances due + interest.

The law does allow a debtor to refile Chapter 13, but there are strings attached.  In a refiled case the automatic stay (the core protection of bankruptcy) would only last 30 days – your attorney would need to file a special motion asking the judge to keep the stay in effect beyond 30 days.

Generally, if case #1 was dismissed because of circumstances beyond the debtor’s control – i.e. a job loss or illness – judges will be amenable to extending the stay and eventually approving a 2nd plan.   However, 2nd cases are inherently looked at with suspicion by Chapter 13 trustees.

About Jonathan

Jonathan Ginsberg represents honest, hardworking men and women in the Atlanta area who need personal bankruptcy protection. In practice for over 25 years, Jonathan teaches bankruptcy law and practice at legal continuing education seminars and he is a founding member of the Bankruptcy Law Network. Jonathan lives with his wife and children in Atlanta.


  1. I am very confused and can’t seem to get the answers I need from my lawyer. filed for chapter 7 in November, means test indicated we should file chaper 13. we paid the additional fees, and have always gotten our attorney everything they have asked for right the same day. seemed like it took them forever to file the chapter 13. when it was finally filed, the creditors stopped calling and a meeting of the creditors was scheduled for March. That was rescheduled for May because not all of the creditors had replied. Then about a month ago, we got a letter from the trustee indicating the case was dismissed because of bad adresses of the creditors that had not been addressed. lawyer said not to worry, they are re filing. In the mean time everyone we were advised to stop paying wants their money. What should I expect from this point? We want to keep our house, we are afraid of forclosure. What exactly is my attorney doing??

  2. @lisa – this does not add up. When you convert from Chapter 7 to Chapter 13, all creditors get notified automatically. Typically the actual conversion is a 2 page document, but you (the debtor) must file new schedules for the Chapter 13. I don’t know what you mean by the statement “not all the creditors had replied.” You case might get dismissed if no schedules were filed but not because of bad addresses for creditors, unless your judge required proper addresses in an order. Is it possible that your lawyer did not file Chapter 13 schedules on time? It might be wise to get a second opinion.

  3. Marie Naylor says:

    My Ch 13 plan was confirmed in Dec. 2010. I am behind 2 month payments and trustee has filed motion to dismiss. I am behind bcs I am separated- husband (has left house yet refuses to take name off deed) has not helped, Ive been paying the 1200 per month but am underemployed at the moment. I am barely surviving.

    My Bkrptcy atty advised I must have 2400 (back pymnts) by next week or there is a hearing for dismissal. What can I do? If I can lower the payments to 900 its do-able….Im doing this all on my own, husband is a deadbeat- are there any motions to extend or help lower my payments? I am very responsible and owe nothing, except the house payment. Please help.

  4. @Lisa: Trust your attorney. Do not panic.

  5. Marie Corkman says:

    Ch 13 is supposed to be dismissed tmrw. I emailed my atty. I have a medical issue, and was separated from my husband since last Oct. If my husband adds his income into the plan, cant she do a CH 13 plan modification? I dont even have a vehicle to get to the hearing tomorrow, imo this is unfair…..My husband wants to help so we dont lose equity in the house- I am upset and dont know what I can do here—please help

  6. @Marie – it seems to me that if you can get a continuance of your hearing date, perhaps you, your husband and your lawyer can try to come up with something. Obviously it would be helpful if you could attend. Perhaps your lawyer can ask for a reset on the grounds that you have no way to get there. Perhaps your husband can attend. Judges tend to be more sympathetic when a debtor is there. If your case does get dismissed, you should ask your lawyer about refiling by yourself or jointly with your husband. Good luck to you.

  7. Barbara Davidson says:

    How long do you have to be dismissed from chapter 13 before refileing?

  8. Barbara Davidson says:

    I just need to no how long before I can refile.

  9. Veronica Daniel says:

    Me and My Husband has been under chapter 13th for 2 years going on 3 years. We receive a letter the other day stating that we suppose to turn over our income taxe money we had 30 days are our chapter 13th will be dismiss. We didnt have to gave them our income the first 2 years why now and there taking 400 month out my husband check. If the chapter 13th is dismiss do I still pay the trustee and start back paying criedtors too. Just need answers dont know what to do. The two years we been under chapter 13th the mortage company hasnt receive anything.

  10. My chapter 13 was dismissed 3 weeks ago because my chapt 13 plan was not acccepted. Can I still file a chapt 13 modification plan or do I need to refile and start all over again. I am unable to afford a lawyer therefore I am alone in this process. I have gone online to download the paperwork for this chapt. 13. Is there special paper work to refile/chapt 13 modification plan for georgia?


  11. Miles Parker says:


    we have been in a 100% repayment plan for 51 months, we have fallen behind the last couple of months due to medical reasons and now just found out my wife has breast cancer and will need 9-12 months of treatment. We also just received noticed the trustee has filed a motion to dismiss. There would be no way we could increase our payment or provide a lump sum equal to our past due amount with our circumstances

    Since we were on the 100% plan, i am not so worried about the creditors going back to cent one, since we were paying back fully, the only creditor in question would be one car loan we had. Also we gave up our house so we have been leasing ever since. Should we even bother to fight the dismissal or just let it flow through and try and set up payments directly with creditors since a majority has been paid back. Also will car creditors even accept payments or will we for sure loss it. Finally, is there any hardship that we might be eligible for like suspending our 13 or discharging it earlier?

    We seemed to have a hard time getting a hold of our lawyers ever since the trustee denied their petition to increase the attorney’s fees on the case, so any help would be greatly appreciated.

  12. @Miles Parker: You should change your filing to a chapter 7 with your attorney.

  13. Jonathan,
    I have been in Chapter 13 for two years now. I just recieved a letter from the Bankruptcy court saying they are dismissing my Chapter 13? I never missed a payment. The letter said The Trustee has reviewed the proofs of claim filed in this case, and beleives that the plan is not sufficient to pay all of the claims as filed. As a result, the plan is unfeasible, and the case should be dismissed pursuant to 11 U.S.C. 1307 (c) (1). I don’t understand do I need to refile? I’m am so upset we have been so good trying to get on track with our life….

  14. My dad is 88 years old and filed Chapter 13 about 3 years ago. The only collateral he had was his 2005 dodge caravan. Dad was living with us for the past 4 years and now is in an Independent living facility and can’t pay his BK payment any longer. I drive dad’s van as we are also in Chapter 13 and have no vehicle. I can’t afford dad’s payments along with ours. Dad has a dismiss motion scheduled on 1/12 and I have no money to bring as I had emergency open back surgery on 12/7. How can we go about keeping the vehicle. If this is taken we have no way to work. We have not missed one payment on our BK. Thanks for your help

  15. Jan this might be a case where you could ask the court to grant a “hardship discharge.” If granted, all claims would be deemed satisfied. Speak to your lawyer about this. You might also look into converting to Chapter 7, then arranging financing to redeem the vehicle. Otherwise, you may want to approach the auto lender about a payment plan. Best of luck to you.

  16. Sammy, the letter to received most likely is a motion to dismiss by the trustee as opposed to an actual dismissal . I suspect what has happened here is that the claims in your case came in higher than expected, thereby making the plan run longer than 60 months. This type of problem is not especially unusual and your lawyer should be able to recommend a fix (which might involve an increase to your trustee payment)

  17. Vicente Ojeda says:

    Good afternoon, I’m so worried about my chapter13 case, we are half of year toward our end of our 5yr case. We just receive a letter from our trustee to pay half of income tax of each year, I might forgot about this matter each year but we had keeping up each year with our weekly payments for 4yrs 6mths, What can we do?

  18. Vincente, I had a similar situation recently. I filed a Motion for Hardship Discharge and asked the judge to waive the tax refund requirement. I had to show that my client used the money for food, shelter and care of dependents. The trustee did not object and the judge granted my motion. That may be the approach you could consider.

  19. I filed chapter 13 on March 14th 2012. When we went to the hearing, the trustee objected to the bankrupcty. He said I didn’t have enough money to make the plan work. Today, my attoney attended the second hearing. I emailed my attorney of some discrepancies I found in my budjet. I do not have the result yet of today’s hearing. My lawer never answers when I call him, nor return my calls. I am giving up my trailer back to the bank and do not know when I will have to move. I feel like I’m alone in this. I feel the lawer should have been smart enough to know before we went to court whether it would be denied or not.He said at the first meeting that I met him that this will work. What do I do know!!!!

  20. Kathy, don’t confuse an objection to confirmation by the trustee with an order from the judge denying confirmation. Trustee objections are form documents that follow a certain format – even a minor objection by a trustee demands dismissal. It sounds to me like you need to schedule a meeting with your lawyer, or at least someone from his staff, to clarify where you stand.

  21. Georgia Girl says:

    I have been sued by a past employeer for $25,000. My attorney says I should contact a Chapter 13 attorney and file bankruptcy. I have no credit card bill..All I have is student loans and a mortgage payment and now this suit. I have been working hard to improve my credit and now this has happened. I was planning on buying a new car until this happened. SHould I proceed with the car?
    I am married and our mortgage is in both our names.
    I dont know what to do.
    QUestions: 1) Does it sound like I should file 13

  22. I am not a fan of making big purchases right before filing – at the very least, talk to a Chapter 13 attorney before making this decision.

  23. I just go a motion to dismiss ch 13 for failure payments behind 4 months but can catch up but if the lawyer or trustee denies what are my options to see the judge this is in the state of Massachusetts. Thank you. B.C.

  24. Adrienne Lee says:


    I filed for Chapter 13 in Dec. 2011 to prevent forclosure. The trustee takes $100/wk out of my check, and has been for the passed 10 months. So all of my payments are current. Earlier this year my car was totaled and the insurance company paid off the car to the trustee totaling about $12,000. Then the trustee withheld a $6,000 income tax return. This left me at a total owed of only $6,000.I called the attorny today to ask what would happen once I paid everything up. I was told that because of the plan that I’m in I’m required to stay under chapter 13 for another 26 months. And that I would continue making payments because the only way my payments could be modified is if I were going through some type of hardship?

    In the meantime, I’ve been working with my lender for approval for a loan modification. If the lender agreed to resolve my delinquencies and reduce my mortgage payments. This would deduct an additional $9,000 from the initial total amount. This would actually put me $3,000 overpayed. Would you recommend that I voluntarily dismiss my case after the loan modification is approved? Or if not approved, after the $6000 is paid off? Also, will the trustee give back what was overpaid? And, will my debts be settled with the funds that I have already paid?

  25. Adrienne, the decision about whether to dismiss calls for legal advice, which I cannot offer on a blog. You seem to have a good handle on the issues here, but I would definitely sit down with my lawyer to discuss all of the moving parts, and the consequences of dismissal.

  26. Brian, generally if you have the money to catch up your payments, the motion to dismiss will be denied. Judges do not want to see cases fail. If the trustee does not want to voluntarily enter into a consent order to resolve the motion to dismiss, your lawyer can argue the matter to the judge. Again, if you have most or all of the money, there is no reason why a judge would rule against you.

  27. Rose Dearman says:

    My husband and I filed for Chapter 13 5 months ago and now find the payments are mire than we can nanage- We own our home, 2 cars, and a commercial building- We are 80 and 74- Husband made unwise stock market investments unbeknownst to me until magins were called -He cashed in every thing we had that could be converted or withdrawn to pay off the loss- About a year ago we received notice that we owed 35ooo to the IRS- Book keeper said that we did not owe this and filed an amended return-That somehow failed to get to the IRS- Facing Credit card debt-IRS debt and taxes on our home and Bldg-We filed Chapter 13- Worst Mistake we or anyone could ever make- We were not told the pros AND cons- We were very sucessful business people owned our own Real Estate firm-Which we sold in 2006- 2009 was the StockMarket loss- My husband was taken advantage of by Stock brokers- He has had 100’s of Mini Strokes but fuctioned well enough that even I did not realize until it was to late that his short term memory loss was out of control- No one else could tell either-As he covers it up. In Sept 2 years ago he had a non silet stroke that left him with added dementia- But if you met him you would never know he has a problem. I say all of this because its how we came to the place we are in. Now I see we are stuck in this Chapter 13 prison- I don’t trust our attorney, and he just told us today our payment is going up. What we claimed in debts at the time of filing-has changed with unexpected expenses. Our Attorney says to sell our assets -But we are in a terrible real estate market- And only have SS and rent from our commercial bldg- Selling makes no sense. I would not advise Chapter 13 or any Bankruptcy for help in financial matters it only makes it worse and your at the mercy of an uncaring system. Better to make your own arangements with creditors.

  28. While I would respectfully disagree with Rose’s statement that Chapter 13 or any bankruptcy only makes matters worse, I do not disagree that Chapter 13 often does not work when a debtor has a complicated financial problem and no steady source of income.  Chapter 13 bankruptcy is sometimes called a “wage earner” plan because it works best when a debtor earns a regular, predictable wage.   It can be difficult to squeeze a complex case into the rigid rules of Chapter 13.

  29. Dear Jonathan,

    I am a disabled veteran that had a TBI (traumatic brain injury), I filed for chapter 13 because I was out of work for awhile and all my bills got behind. When I filed, I hadn’t even returned to work but was going back the following month. I was given a substantial amount for my repayment (mainly because there was thinsg in there that maybe should not have been included) such as an old bill that I had with my ex-husband that I still have to pay because morally I didnt want to stick him with the bill, so its in my bankruptcy and I still have to pay the creditor.
    Anyway, I got confused because my attorney told me that the trustee said I can afford an additional $165.00 on top of the $1330 that was my plan amount, he went by my taxes from the previous year when I was healthy, and I also had a college credit on there for my 24 year son who I cannot claim him or the college credit anymore, so my taxes will not be the same. When the trustee rejected the payment plan, I thought I had to wait until someone told me what my payment would be which my court date was on Nov.29, on Nov. 30 my case was dismissed for nonpayment. I paid almost 3,000 dollars for the two months, on Nov. 30, but I am not sure if they are going to accept it now. Will I get back my money since it was dismissed.

  30. We filed Chapter 13 and are on our 3rd year and we had our plan modified when I stopped working. When they modified our plan we were no longer repaying at 100Z% so they wanted our tax return. So they just sent a letter requesting our last years income which we no longer have and they want 2606 in 21 days or they dismiss. Which is close to impossible. What to do?

  31. i been in my chapter 13 for 2 years 7 months. My income taxes have been taking for the first 2 years. I lost my job April 2012. I reported to my lawyer that i had lost my job and was told to hold on you’re almost done(probably paralegal in office.), Looks like December 2012. Okay, im struggling looking for work and unemployment is barely making ends meet.I held on made the payment,Go into office in January 2013 the tell me i possibly have 7 more months and the trusteee will take my taxes again this year. that will mean that i’ve overpayment the judgement. The paralegal refers with the lawyer and tells me my taxes are on top of my judgement for the chapter 13? I asked why its there a judgement. Why should i continue to pay into a plan that i met the requirements so i may overpay to meet the 36 months when i can barely afford to eat. gas for my car to look for employment, rent?WTF. My lawyer is useless. Big Firm doesnt mean better. What can i do? i need help?

  32. Talk to your lawyer. You may be able to file a motion to excuse requirement to pay tax refunds to trustee. That would have to be argued to the judge.

  33. N, you are in a tough situation. First, your lawyer can petition the court on your behalf for you to keep your refund given these circumstances. I do this routinely with success in the Northern District of Georgia, where I practice. I’m not sure what you mean by “judgment for the Chapter 13” but I am assuming you mean your total Chapter 13 obligation. The problem, I suspect, is that it is very difficult to change lawyers in the middle of a Chapter 13 – most bankruptcy courts will require a separate fee petition and if a lawyer is applying for $500 or $750, but has to spend 3 or 4 hours in court of unbilled time waiting to be heard on that fee application, the lawyer ends up losing money. Your situation may be one where “the squeaky wheel gets the grease.” Insist that your lawyer do his job – you need to be talking to a lawyer, not a paralegal. Good luck.

  34. I was asked by a friend to look into his current chapter 13. His plan is for 5 yrs and he has been paying on-time for 3yrs. He want’s to get out of this arrangement. Will be need to consult the mortgage company(which is the only reason for this plan) Perhaps they will settle with him for a reasonable amount?

  35. Another case….if I file a chapter 13 for a friend who is on a fixed income, which is below poverty level, will he qualify to save his home? This is his only goal. His mortgage company has placed a foreclosure and will not except any payments.

  36. Lavonia, you will get back any funds collected by the trustee and not yet distributed to creditors or used for administrative expenses.

  37. Danyelle Knight says:

    We are currently in a ch 13 bankruptcy and have been for quite some time. We have fell behind in the payments and the trustee has filed a motion to dismiss. During our bankrupcty, our bankruptcy attorney filed bankruptcy, great huh! So we are left with nobody to ask questions and see us to the end even though they got paid up front. With that being said, what can we do at this point since we have been sent a motion to dismiss? Would it be possible to transfer to to a ch 7? Please let me know if you can help us! We are desperate at this point not knowing what to do. Thank you!

  38. I am near the end of my Chp. 13. I did not submit tax returns and am now in jeopardy of having my case dismissed. Is there anything that can be done to stop the dismissal?

  39. My ex-husband passed away recently. Our Chapter 13 will be complete January 2016. He had assumed the payments in our divorce decree. I am unable to pay these due to the fact they are more than half my salary. The BK court tells me it falls to me. I have yet to get any answers out of our attorney that handled the bankrupcty. Help! Where do i stand?

  40. Kendra, whatever agreement you had with your husband to split payments for your Chapter 13 does not bind the bankruptcy court. That being said this might be a case where a “hardship discharge” could be appropriate. I would talk to your lawyer about pursuing either a hardship discharge or maybe a conversion to Chapter 7. You are wise to take a proactive approach to this issue. Best of luck to you.

  41. Thank you. Hence the problem with getting the attorney to call me back. We had issues with him about the divorce. The attorney has been paid his full price.

  42. Difficult situation. Here’s what I would do: 1. if the lawyer has partners or associates, I would try to contact one of them to say that you need a call back or you are going to have no choice but to call the state bar association for help. A state bar threat is very serious so I would not make that my first call but you need to let your lawyer know that his inaction could damage you. 2. I would also send your lawyer a letter (send it registered mail, return receipt requested) insisting that he contact you. 3. Contact the Chapter 13 trustee directly and explain that your lawyer will not contact you – often a letter from the trustee will do the trick. 4. If all of that fails then contact the state bar for guidance on the grounds that your lawyer has abandoned your case.

  43. My experience has been that judges look for any reasonable argument to avoid seeing an almost completed case dismissed. Why not submit those returns now and ask for forgiveness?


  1. […] creditors can once again proceed with collection activity. As Georgia bankruptcy attorney, Jonathan Ginsberg explains: When a Chapter 13 case is dismissed, creditors can immediately pursue all non-bankruptcy […]

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