Motion to Dismiss Chapter 13 for Non-Payment
From the beginning of your Chapter 13 case, our Montgomery bankruptcy attorneys stress that you must make your Chapter 13 plan payments. This is why it is imperative that we work with our clients to calculate a Chapter 13 payment in which they can afford. However, there are events which can occur in a debtor’s life which makes it impossible to pay some of their Chapter 13 payments. We have seen events such as medical emergencies, job loss, reduction of hours, or even a divorce which make it impossible for the debtor to maintain the Chapter 13 payments. In some situations, we may be able to reduce a payment based upon a client's reduction of income. It must be stressed that if you do not make your Chapter 13 debt consolidation payments that you will not receive a discharge from the court. If you stop making your Chapter 13 payments, the bankruptcy trustee will likely move to dismiss your Chapter 13 case for non-payment. The bankruptcy judge will be the one to hear the motion to dismiss and if granted your case will be dismissed and you will no longer have the protection of the bankruptcy court.
If you case is dismissed, this will lift the automatic stay and your creditors can proceed with all of their collection efforts against you. The creditors would then be able to proceed with any garnishment efforts, repossession of your vehicles, or foreclosure on your home. To avoid this process, we stress that you must make your Chapter 13 payment and if you can't please contact us immediately! Most debtors become very upset if they receive a motion to dismiss their Chapter 13 case. We may be able to show that the non-payment of your Chapter 13 plan was beyond your control. If this is the case then the court may allow you to resume your payments or the court may order that your Chapter 13 plan payments be increased. Because of the missed payments this will allow your Chapter 13 bankruptcy plan to move forward. Of course we want your Chapter 13 debt consolidation plan to move forward so that we can protect all the assets of the estate and to prevent the creditors from pursuing collection actions against you.
If you are unable to move forward with your Chapter 13 case, it may be possible to ask the bankruptcy judge to convert your Chapter 13 case to a Chapter 7 case. While this may be an option there are many consequences to consider before we make that request to the Chapter 13 bankruptcy judge. We have to consider if you will be able to keep your home, cars, and any other secured debts that you have. If you cannot afford a Chapter 13 plan the final option would be to request that your Chapter 13 plan be dismissed. In certain rare circumstances it may be best for your case to be dismissed and for you to negotiate directly with your creditors to work to find a solution to your debts; however, this is something that our Montgomery bankruptcy attorneys rarely do, and it will be discussed in detail with our clients before we decide to proceed down this path.
If the Motion to Dismiss is granted by the court, you may be able to immediately file again for Chapter 13 or Chapter 7 protection. This means that you will start the process all over. You will have to go through credit counseling and a new bankruptcy petition must be prepared and filed based upon your current financial situation. We will generally file another Chapter 13 plan as long as we can show to the court that you are making a good-faith effort to try to repay your debts through the consolidation plan. We must also state a good reason why you are unable to complete the first repayment plan, and why we believe the second plan will be different.
At The Sellers Law Firm, once you file a Chapter 13 debt consolidation plan with our office, we will make every effort to assist you in staying in that plan! Our Montgomery bankruptcy lawyers are experienced in handling the issues that may arise in a case. All consultations are always free, and we can usually see you within 24 hours. We have four offices located in Montgomery, Selma, Greenville, and Troy. You may schedule an appointment with one of our attorneys by calling 334-LAWYERS (529-9377) or by using the “text us” link or Contact Form on our website. Remember that doing nothing, changes nothing so act today!