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Can a Bankruptcy Be Reversed?

Once a bankruptcy case has been filed, having the case dismissed depends on which chapter of bankruptcy you have filed and the specific facts about your situation.   These are situations where a debtor files for bankruptcy and, prior to discharge, changes their mind about continuing with the bankruptcy.

Chapter 7 & 11 Dismissals of Voluntary Cases Before Discharge

Not all requests to dismiss the bankruptcy case are granted.  If a debtor wants to dismiss their bankruptcy case before discharge, they must file a request to the Court where the Judge will determine if dismissal is in the best interests of the creditors.  To have a dismissal granted in a Chapter 7 or 11 case, you must explain how the dismissal is in the best interests of the creditors.

An example of dismissal that would be in the best interests of the creditors would be if after filing for bankruptcy, the debtor obtains new employment that provides sufficient income to pay the creditors.

An example of dismissal that would not be in the best interests of the creditors is if the debtor has sufficient non-exempt property to satisfy the creditors.  This most commonly happens when a debtor wrongfully assumes an asset or account is exempt from the bankruptcy and later finds out after filing that the asset or account can be used by the trustee to satisfy creditors.  For example: a person files for Chapter 7 bankruptcy assuming that a certain stock portfolio is exempt but later learns that the stocks are not exempt.  That person may want to dismiss their Chapter 7 bankruptcy to avoid being forced to sell their stocks in which the Court may deny the dismissal because the creditors can be paid by the sale of the stock.

Another example of where the Court may deny a request to dismiss is in the situation where the debtor has repeatedly filed for bankruptcy and then dismissed (in the past); the so called “serial filer.”

Chapter 13 Dismissals Before Discharge

Chapter 13 bankruptcies are completely voluntary, and no person can be forced into a Chapter 13 bankruptcy.  Because of the voluntary nature of a Chapter 13 case, the dismissal is simple and only involves the filing of a “Motion for Voluntary Dismissal”.

The limited areas where a Motion for Voluntary Dismissal are denied are (1) when the case was originally filed as a Chapter 7 and later converted to a Chapter 13 or (2) when the dismissal is sought in bad faith.

Pre-Bankruptcy Planning

Getting the advice of an experienced attorney before filing for bankruptcy can help you stay out of the situation where you are forced to remain in a bankruptcy you do not wish to pursue.  Burnham Law provides its bankruptcy clients with pre-filing planning to reduce the risk of this dire situation.  In the pre-filing stage, Burnham Law can assist so that you file your bankruptcy case at the right time to avoid the loss of property you would not otherwise have lost.

In addition to making sure you file at the best time, our attorneys at Burnham Law can show you exactly what property will be exempt from the bankruptcy and what property will not.

What if you Already Filed?

If you have already filed your Chapter 7 bankruptcy and want it dismissed, Burnham Law can assist.  Our experienced attorneys will represent you in a manner to maximize your assets.  We have experience in building a case to show your judge that the dismissal is in your creditors’ interests.  Alternatively, if the judge has denied your request to dismiss, we have successfully transferred Chapter 7 cases into a Chapter 13 such that our client retained all of their assets.

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