Before filing a bankruptcy case, people want to know what can go wrong and what they need to do to ensure the case goes smoothly. While there is some general advice for all cases, some things will be specific to your situation. A chapter 7 is generally much more likely to complete than a chapter 13, which requires a repayment plan of 36 to 60 months. This article will go over many things to avoid, if possible, but if you have specific concerns, you should contact your attorney.
A few procedural issues can create a snag in your case.
If you've filed another bankruptcy too recently, don't pay the filing fee, don't take the required classes, or don't cooperate with your case trustee, your case may be closed without discharging your debt. It's essential that you are honest on all papers filed with the court. You should carefully review anything that is filed. If your attorney makes a mistake and files something incorrect, you can be held responsible, so you must review all documents for accuracy.
Other than that, your attorney should guide you through the process, so you shouldn't have to worry about the procedural issues too much as long as you follow your attorney's instructions.
Chapter 13 cases are more complicated than chapter 7 and, in fact, a large percent of chapter 13 bankruptcies are dismissed before completion. Some cases are dismissed voluntarily, because they helped the filers reach their goals and the case is no longer needed.
Other cases are dismissed for a variety of reasons, but the most common is that the filer is unable to maintain the plan payment.
It's not surprising. Repayment plans can be in place for up to five years. Many things can happen in five years, both good and bad, that can affect a person's ability to complete a repayment plan. Job changes, illness, death, and divorce all can lead to missed bankruptcy payments, and eventually, a dismissed case. If your situation changes, speak to your attorney about trying to lower your plan payment.
Sometimes a bankruptcy case is filed to try to save a home when the homeowner is behind on the payments. The homeowner may hope to buy more time to try to modify the mortgage loan, or they may be trying to bring the payments current by paying extra each month. These cases have a high risk of failure. When someone falls behind on their mortgage payment, it can be very hard for them to resume that payment, plus some extra, unless something significant has changed. If the hardship was temporary, like a short-term injury that temporarily reduced the person's income, this case is easier. But if the hardship is long-term and ongoing, it's very difficult to make the required payments to save the home.
Your attorney wants to see your case succeed, so you should speak to them about any concerns you have. If you are in a chapter 13 case and your circumstances or goals change, you should contact your attorney right away to discuss all of your options. They will help you determine the best way to proceed, given your current situation and where you want to end up.