Can I Change My Mind and “Cancel” My Chapter 13 Case?

  Facing debt emergencies can be stressful for anyone and we often see clients who want to file bankruptcy immediately to stop a pending repossession or wage garnishment.  While Clark and Washington is always available to deal with these emergencies, we encourage our clients to think carefully about both the short term and long term effects of a Chapter bankruptcy filing.  We have created this web site for you to use as a learning resource so that you can educate yourself as much as possible about the bankruptcy process.

  Sometimes, however, we do get calls from new clients who decide shortly after filing that they do not want to be in Chapter 13 after all.  “Can you please cancel my filing,” is the common request.

  In fact, Chapter 13 cases cannot be “canceled.”  In most instances we can voluntarily dismiss your Chapter 13 but your case number and the record of your filing will remain on your credit report.

  We also urge our clients to be very careful about dismissing a Chapter 13.  Firstly, all of the debt issues that prompted the Chapter 13 filing in the beginning will still be there.  The immediate emergency may be over but it will come back.  Under the current bankruptcy law, re-filing a Chapter 13 can be much more difficult, costly and time consuming.

  Second, there is a hidden risk associate with voluntarily dismissing your case.  Under Section 109 of the Bankruptcy Code, a debtor who voluntarily dismisses his case after a Motion for Relief has been filed in that case is not eligible to re-file for 180 days.  At the very least, therefore, if you decide to voluntarily dismiss your case, you should process that dismissal through our office and not try to do it on your own.

  Finally, we advise our clients that even if you dismiss and are eligible to re-file, the trustees and creditors will subject your second case to a great deal more scrutiny than your first.  Bottom line: your decision to file bankruptcy in the first place should be well thought out, and any decision to dismiss your case should be even more thoroughly considered.