Bankruptcy Basics: The Motion to Dismiss

The U.S. Bankruptcy laws are designed to give honest debtors a fresh start in exchange for following specific requirements. For example:

• If you file Chapter 7, you are expected to provide a full financial disclosure and surrender nonexempt property to your trustee for sale and distribution to your creditors. 
• With Chapter 13, you provide a financial disclosure and repay your debts over a three to five-year period.

If you don’t fulfill your obligations, the U.S. Trustee may file a motion to dismiss your case with the bankruptcy court. This means that your case is ‘thrown out’ before you get the discharge you need. 

What Happens When Your Case is Dismissed?

When the court dismisses your case, you are no longer protected from your creditors. Collection actions like wage garnishments, bank account freezes, and lawsuits can start back up. It will be like you never filed for bankruptcy protection in the first place, although the filing will remain on your credit report.

Why are Bankruptcy Cases Dismissed?

Bankruptcy cases are usually dismissed because you failed to fulfill one of more of your obligations. Common examples include: 

• You did not file all necessary forms:  If you urgently need to stop a collection action like a wage garnishment, you can do an ‘emergency’ bankruptcy filing by submitting only the petition. However, all the necessary forms need to follow, and failure to file them by the required deadline can result in your case being dismissed.

• You did not pay the court filing fee: Unless you receive a fee waiver or approval to pay in installments, you are expected to pay a court filing fee when you submit your bankruptcy petition. If you fail to do so, your trustee may move to dismiss your case.

• Failure to attend the meeting of creditors: Every bankruptcy case involves a meeting of creditors, which you must attend. If you don’t show up, your case will be dismissed unless you notify your trustee in advance that you are unable to attend. 

• Failure to make plan payments: When you file Chapter 13, you are expected to repay your debts over a specified time period. If you fail to make these payments, the court will likely dismiss the case.

In some cases, like failure to file all necessary forms or pay the filing fee, the dismissal is automatic. With others, like missing plan payments and failure to attend the creditors’ meeting, your trustee will file a motion to dismiss with the courts.

Contact a Michigan Bankruptcy Attorney

In a lot of cases, case dismissals can be avoided by applying for necessary waivers or extensions. If you are planning to file for bankruptcy in Michigan, Maxwell Dunn PLC can help you overcome any challenges that could jeopardize your chance at a fresh start. For more information or to schedule a no-obligation case review with a bankruptcy attorney, contact us today.