Amy Z of Palm Harbor, asks, “Can a Bankruptcy be Dismissed after filing”? Thank you Amy from Palm Harbor, Florida. Generally, a Debtor can either Dismiss a Chapter 13 after Filing a Chapter 13 Bankruptcy.
A Debtor may seek to Dismiss a Chapter 7 Bankruptcy after filing. A Debtor may wish his Chapter 7 Bankruptcy Dismissed because an aggressive Chapter 7 Bankruptcy Trustee may be seeking to Seize or Liquidate Assets that the Chapter 7 Debtor possesses. The Debtor, before filing Chapter 7 Bankruptcy may not have foreseen that the Bankruptcy Trustee would seek to Seize or Liquidate the Assets that are the subject of the Bankruptcy Trustee’s actions.
If the Debtor seeks to Dismiss his Chapter 7 Bankruptcy, in such an instance, the Bankruptcy Trustee would probably Object to such a Dismissal, and the Bankruptcy Judge would not likely grant the Dismissal request.
The Chapter 7 Bankruptcy Debtor would then have three or four options. The order of this options does not speak to their respective importance. Which option is best for you would depend upon your particular situation.
One option the Debtor would have would be to simply allow the Trustee to Seize and Liquidate or Sell, the Property or Assets that are the subject of Seizure. A Second option would be to work out a Buyback with the Bankruptcy Trustee. In a Buyback, the Debtor basically “buys back” the monetary value of the Non Exempt Assets by paying the Trustee a determined amount.
A third option is to Convert the Chapter 7 Bankruptcy to a Chapter 13 Bankruptcy (or a Chapter 11 or Chapter 12 Bankruptcy). Generally, the Debtor may Convert his Chapter 7 Bankruptcy to another Chapter of the Bankruptcy Code, provided the Debtor is not committing Bad Faith, in doing so. See Section 348 of the Bankruptcy Code.