The bankruptcy court can dismiss your Chapter 13 case for many reasons. In most cases, you can file a new bankruptcy right away. But sometimes it can be in your best interest to appeal the dismissal order to a higher court for further review.
To learn more about what happens if the court dismisses your Chapter 13 bankruptcy, see When a Bankruptcy Case Is Dismissed.
Reasons the Court Might Dismiss Your Chapter 13 Bankruptcy
When you file for Chapter 13 bankruptcy, you must be honest in your paperwork, follow all bankruptcy rules and procedures, and make all of your required Chapter 13 plan payments. Otherwise, the court can dismiss your case without a discharge.
In general, the court might dismiss your Chapter 13 bankruptcy because of:
- procedural mistakes such as your failure to file the correct forms, provide supporting documents, or attend required court hearings
- failure to make your Chapter 13 plan payments, or
- willful misconduct such as disobeying court orders, lying on your bankruptcy paperwork, hiding assets, or otherwise abusing the bankruptcy process.
For more information on specific reasons that can cause the court to dismiss your bankruptcy, see Reasons the Court Might Dismiss Your Bankruptcy Case.
The Court Can Dismiss Your Bankruptcy With or Without Prejudice
A bankruptcy judge can dismiss your case with or without prejudice. Here is the difference.
Bankruptcy Dismissal Without Prejudice
If your case is dismissed without prejudice, it means that you can refile immediately. Unless you disobey court orders, abuse the bankruptcy system, or engage in other intentional misconduct, the court will typically dismiss your case without prejudice. In general, if the court dismisses your case without prejudice, it’s usually a better idea to simply refile your case rather than appeal the dismissal.
Bankruptcy Dismissal With Prejudice
If you engage in willful misconduct or file for bankruptcy multiple times to delay your creditors, the court might decide to dismiss your bankruptcy with prejudice. Depending on the judge’s order, a dismissal with prejudice can have significant consequences including:
- time limits on when you can file for bankruptcy again, and
- restrictions on which debts you can discharge (eliminate) in a future bankruptcy filing.
Because a dismissal with prejudice can have several negative consequences, it might be worthwhile to appeal the decision to a higher court for further review.
To learn more about dismissals with and without prejudice, see What Does Dismissed With Prejudice Mean? and When Your Bankruptcy Case Is Dismissed Without Prejudice.
Appealing a Chapter 13 Bankruptcy Dismissal
In order to appeal a Chapter 13 bankruptcy dismissal, you have to file a notice of appeal within 14 days after the court dismisses your case. If you need more time, you can file a motion with the court to request an extension.
After filing the notice of appeal, you must file additional paperwork that outlines the reasons why you believe the bankruptcy court should not have dismissed your bankruptcy. In addition, you must attend a hearing to explain your reasons to the judge in person.
Because of the complicated nature of the appeals process, you will normally need an attorney to help you. But keep in mind that appealing a Chapter 13 bankruptcy dismissal can be very costly and you might not be successful unless you can prove that the bankruptcy judge committed a legal error.