Putting People’s Financial Worries Behind Them

What Factors Can Cause Your Bankruptcy Filing To Be Dismissed?

Interviewer: If your bankruptcy is dismissed, what can cause that?

Vance: For nonpayment. As far as a Chapter 7, you don’t see too many of those being dismissed unless the U.S. Trustee determines that these individuals need to be in a Chapter 13 and pay back some of their debt.

Chapter 13 bankruptcies are generally dismissed for nonpayment or for failing to provide documents that are needed to the Chapter 13 trustee.

Is It Possible To Re-Submit A Bankruptcy Filing After It Has Been Dismissed?

Interviewer: If one is dismissed, can it be fixed, and if so, how, and how long would you have to wait to file again?

Vance: It depends under what statute it was dismissed. I mean, sometimes a bankruptcy can be dismissed with sanctions. If it is dismissed with sanctions, then you have to wait 180 days to re-file another bankruptcy.

109G Sanction

For that to occur, the debtor would have had to make some pretty egregious errors. That means that a debtor did not provide the required documents, they’re not making payments, and they didn’t attend any of the 341 hearings with the Trustee. Essentially, they filed bankruptcy and then they just disappeared, so they would dismiss that bankruptcy with a 109G sanction.

Interviewer: That would be under Chapter 13 or a Chapter 7?

Vance: Either a Chapter 13 or a Chapter 7. You are provided with an opportunity to correct any errors, so very seldom are bankruptcy cases dismissed, but it can be fixed.

Interviewer: How is that?

In The Case Of Dismissals, A Bankruptcy Attorney Can Ask The Court To Reinstate The Bankruptcy In 30 Days

Vance: You have to address the issues early. If your case is dismissed, we can generally go back to the court and ask for it to be reinstated if it’s within 30 days.

What Is The Role Of The Bankruptcy Trustee?

Interviewer: What is the role of the bankruptcy trustee?

Vance: The Chapter 7 trustees administer the case. There are also Chapter 13 trustees. Usually here in the Akron area, there are six Chapter 7 trustees and one Chapter 13 trustee.

They have the hearing. It’s called a 341 Creditors Meeting. That’s where you meet with the trustee. All of the creditors have a right to appear at the hearing, but most of the time, nobody shows up, so it’s generally just my client and I with the trustee. The trustee is just verifying that what we put together and filed is fair to the debtor and fair to the creditors.

Is The Final Determination Of A Bankruptcy The Responsibility Of The Bankruptcy Judge?

Vance: Yes. The confirmation goes to the court, but generally, if the trustee recommends confirmation or discharge, the judge just rubber-stamps it.

Interviewer: Have you ever seen a judge rule against what the trustee recommended?

Vance: No, not for the confirmation and the discharge. If a trustee recommends that the debtor has performed as they should under the plan or under the bankruptcy, then they have a right to a discharge.

If You Have To Liquidate Assets In A Bankruptcy, Can You Select Who Buys The Asset?

Interviewer: If you’re forced to sell something in a bankruptcy, can you maybe sell it to a friend at a discount or is that unethical?

There Is A Two-Year Look Back Period On Asset Transfers; Ohio Has Instituted A Four-Year Look Back Period On Real Estate Transfers

Vance: No. That will not happen. There’s a two-year look back period when you file bankruptcy as far as the transfer or the selling of any asset. Now in the state of Ohio, there’s a four-year look back period on the transfer or the selling of any real estate, so all those have to be disclosed in the bankruptcy petition.

Any personal property such as a car or a boat or any personal property that was sold has to be disclosed in the bankruptcy petition.

Things have different values to different people, but if the amount was fair, the trustee will inquire as to who you sold it to. If it was a friend or family member, they would really scrutinize it and make sure that the amount that the debtor received was a fair amount.

Asset Transfers And Sales Are Scrutinized To Protect The Creditors

The trustee would also inquire as to what happened to the funds. The trustee just will make sure that the debtor was not selling the asset to the detriment of the creditors.

Interviewer: The same applies if they gave a car supposedly as a gift to a family member?

Vance: Right. That would have to be disclosed.