Dismissing your Case in Bankruptcy
I. The consumer wanted to dismiss the case
What are the common reasons why a consumer would want his/her case be dismissed?
• He/she found out that his/her major debt is not dischargeable after all and that his/her other debts are not enough to justify a bankruptcy case.
• A property that he/she thought was exempt turns out to be not and he/she does not want to lose that property to bankruptcy.
• There was, all of a sudden, money to pay for all the debts.
• He/she found out that he/she has more property in his/her estate after all.
• A bankruptcy case is just too complex without a lawyer and he/she really could not afford to hire one.
• The whole process is just too much and it is better to give up.
How to withdraw the bankruptcy petition
1.) The consumer should first check the court’s local rules regarding “voluntary dismissals” and find out the time limit, types of papers to be submitted (Petition for Voluntary Dismissal and Order Granting Voluntary Dismissal) and all the other requirements because those rules vary per district. All that information can be obtained from the court clerk, from the trustee assigned to the case, the local petition preparer, and of course, from the bankruptcy lawyers.
2.) Make copies, at least 2-3 of the papers and documents, and then take both the original and the copies to the bankruptcy court clerk. Once there, find out from the clerk the following:
• The type of notice the creditors would need.
• If there should be problems with the case, would he/she be contacted, and by whom.
• Once the judge signs the order, when can he/she expect to receive the paper.
• When he/she receives that order, who is responsible for giving the creditors a copy, and if it is necessary to file a Proof of Service.
What is Proof of Service?
It is a paper from the court which serves as a proof that all the concerned parties to the case were notified.
*Send the creditors a copy of the order if it turns out that it is the consumer’s responsibility to do so.
3.) After filling the motion to dismiss with the trustee, a hearing would be scheduled, and if there would be no objections from the creditors and/or the trustee, the case will be dismissed on the day the court date itself.
4.) Prepare to face the consequences of the bankruptcy withdrawal. Meaning pay the bills.
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