What Happens When a Chapter 13 Case Is Dismissed?
When a debtor files for Chapter 13 bankruptcy, they are proposing a repayment plan to the court to repay their debts over a 3-5 year period. However, if the court dismisses the case, the debtor is no longer protected by the automatic stay and creditors can resume collection activities.
In most cases, the court will only dismiss a Chapter 13 case if the debtor has failed to make their required payments or has otherwise violated the terms of their repayment plan. If the court does dismiss the case, the debtor will still be responsible for repaying their debts.
While a dismissal can be stressful for debtors, it is important to remember that they are still obligated to repay their debts. Creditors may be more aggressive in their collection activities after a dismissal, but debtors can still negotiate with them to try and reach a payment arrangement.
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