Should You Stop Your Bankruptcy Case? Can You?
The goal of any bankruptcy declaration is to gain financial protection and a chance to start over with a clean slate. But sometimes, a debtor who enters bankruptcy may find that it's not working and they want to stop the process. Why may this happen? And how can you accomplish it? Here are a few answers to these questions.
Why Stop a Bankruptcy?
Either the debtor or the court may feel that stopping the bankruptcy is the right move. For debtors, this often occurs in Chapter 7 (liquidation) when a debtor realizes that an asset will be seized but they want to keep it. Alternatively, a debtor may have a sudden financial windfall that changes their entire budget and makes bankruptcy no longer the best option.
The judge may also look at a case and dismiss it if the claimants aren't following the rules. A bankruptcy claimant must attend creditor hearings, file their taxes, complete an educational course, and make payments (under Chapter 13). If you fail to do these things, the judge may dismiss the case entirely.
Is the Case Likely to Be Stopped?
Unfortunately, changing your mind after you file for bankruptcy is not an easy thing. Debtors can't voluntarily stop their case, but they can ask the judge for a motion to dismiss. However, the trustee and judge in your case have to think about the rights of the creditors as well as yours. Dismissal is likely to be hard to achieve at this point.
Is Dismissal the Only Option?
A debtor may have alternatives to simply giving up on bankruptcy. For instance, if you worry that an asset (like your car or home) will be taken to pay off debts, you may be able to better protect it by switching to a Chapter 13 repayment plan. So rather than seeking a dismissal, you might seek a change in chapters.
The other most common reason for a debtor to seek dismissal is when they entered bankruptcy without the help of an attorney. Filing on their own may mean the claimant didn't understand how their case would work or they only now realize they have better financial options.
What Should You Do First?
If you're considering whether or not to continue with your bankruptcy, start by consulting with a bankruptcy attorney. They will go over your case and explain all your alternatives, including seeking dismissal as well as converting your case. Call today to make an appointment and start finding the best path to financial success.