QUESTION
Can we file for voluntary dismissal if my husband and I are starting year 3 of a 5 year plan?
Asked on Jan 29th, 2016 on Bankruptcy - Michigan
More details to this question:
We will end up paying 100% of our debts if we stick with the plan. Our monthly payment is $3100, which is really making it difficult anyway and now one of our vehicles has broken down and will cost around $3000 to repair. Both of our vehicles were included in the plan and both are completed in payoff according to the NDC website. We have $40000 in unsecured debt left in addition to $63,000 in student loans. I know that the student loan has been continuing to accrue interest and will still be out there at the end of the 5 years. We have paid in $73000 which has covered the vehicles and some of the unsecured debt. Would that make sense at this point? I don't know how we would come up with the money to pay for the repair otherwise.
5 ANSWERS
Without looking at your actual total financial situation, which would likely take me a couple of hours, I cannot say whether you should take this drastic step. If you do not trust the judgment of your current attorney, I would spend some money for a second opinion.
Answered on Feb 29th, 2016 at 5:10 PM
2 Awards
You always have the right to voluntarily dismiss your 13 at any time so long as it was not converted previously. Many of your creditors may have written off the debts at this point; however, without completing your plan you will not receive a discharge. You may be able to qualify for a hardship discharge. I recommend you consult with an attorney to go through your specific facts before deciding to dismiss.
Answered on Feb 29th, 2016 at 5:07 PM
Commercial & Bankruptcy Law Attorney serving Powell, OH
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Ronald K. Nims
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I generally don't advise Chapter 13 clients to seek a voluntary dismissal unless they can't qualify for either a hardship discharge or a plan modification because you'll lose the protection of the bankruptcy court and won't be discharged of any of your debts. Including interest charges or unsecured principal on those two cars. A hardship discharge will immediately terminate all payments under the Chapter 13 and you'll receive a discharge from all your unsecured debt and get the cars free and clear. A plan modification will reduce your plan payments and the amount unsecured creditors receive.
Answered on Feb 29th, 2016 at 5:07 PM
Derek W. Freeman
Dismissing your bankruptcy should be your absolute last resort. If you've had a change in your circumstances, you may be able to modify your bankruptcy plan. I would try that first. You may be able to reduce your payments or lengthen the duration of the plan or both, which could provide you with the extra cash you need to repair your car. Dismissing a bankruptcy is usually a bad idea, but it might be the best bad idea available to you. You should explore other options first.
Answered on Feb 29th, 2016 at 11:04 AM
Bankruptcy Attorney serving Livonia, MI
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Charles J. Schneider, P.C.
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Probably not. You ought to see if the payment can be lowered.
Answered on Feb 29th, 2016 at 10:31 AM