Reasons Bankruptcy Cases Are Dismissed

In most bankruptcy cases the goal is for the debtor to eventually receive a discharge. The discharge protects debtors from collection of most of the debts listed in the bankruptcy case permanently. But sometimes cases get dismissed before the debtor receives a discharge. The most common reasons bankruptcy cases are dismissed are failure to make payments to the trustee under the Chapter 13 plan and failure to file documents with the court or provide them to the trustee.

Dismissal For Failure to Make Payments to Trustee

Chapter 13 bankruptcy requires the submission of a reorganization plan. These plans provide that the debtor will make payments to a trustee each month for the duration of the plan. The money paid to the trustee is disbursed to the creditors listed in the plan. The payments are a requirement of the bankruptcy. If the debtor fails to make payments the trustee will file a motion to have the case dismissed.

Dismissal Because of Insufficient Paperwork

At the beginning of the case debtors are required to file many different documents with their bankruptcy petition. Failure to provide any of these documents can end in dismissal of the case. However, document submission doesn’t end after submission of these initial documents. For example, the debtor is required to provide copies of their last two years tax returns before their 341 meeting. In the Northern District of Texas, debtors must provide a certificate certifying that they have filed all prior tax returns required by Federal Law, and if they pay child support they must file a statement certifying that they have paid all child support payments due at the time the case is confirmed. In the Eastern District of Texas, debtors that operate their own business must submit operating reports monthly. Failure to submit any of these documents can end in the case being dismissed.