Proof of Claims
Motion for Relief From Stay
Objection to Confirmation
Objecting to Discharge
Rule 2004 Examinations
In the vast majority of bankruptcy cases there are no grounds for a creditor to ask the bankruptcy court to outright dismiss a bankruptcy case. In some reorganization cases, depending upon the facts, there can be quite a few ways to seek dismissal of a case, but still it is not a common motion filed by a creditor. The United States Trustee’s office or a bankruptcy trustee is much more likely to seek dismissal of a case. If you believe you may have grounds to seek to dismiss the bankruptcy case of someone that owes you money we can help. We will analyze the bankruptcy petition and your facts in support of dismissal. If the facts justify asking the bankruptcy for dismissal we will file a motion to dismiss.
Motion to Dismiss in Chapter 13 Bankruptcy Cases
In Chapter 13 reorganization cases there are many reasons why a creditor may ask the bankruptcy court to dismiss a case. Unlike in Chapter 7 cases, creditors and other parties in interest have a right to seek dismissal or conversion of a Chapter 13 case to Chapter 7, whichever is in the best interest of creditors. Dismissal or conversion can be requested for unreasonable delay that is prejudicial to creditors, unpaid fees, failure to timely file a plan of reorganization, failure to make Chapter 13 plan payments to the trustee, denial of confirmation of the plan with denial of a request made for additional time for filing another plan, material default by the debtor with respect to a term of a confirmed plan, failure of a debtor to make domestic support obligations, failure of the debtor to file a tax return under section 1308, on request of a party in interest and after notice and a hearing.
There are actually quite a few additional grounds to seek dismissal of a Chapter 13 case. Seeking dismissal is tied closely to Objection to Confirmation of the plan of reorganization. If the debtor cannot propose a feasible plan or confirm a plan within a reasonable time most objections to confirmation should be tied also to a motion to dismiss the case for undue delay that is prejudicial to creditors. If the case has been pending for more than 8 months and the debtor is not doing anything to move the case closer to being confirmed, then creditors are stuck not being able to continue collection activities to their detriment. Motions to dismiss in Chapter 11 reorganization cases can be made for similar grounds as in a Chapter 13 reorganization case.
Motion to Dismiss in Chapter 7 Bankruptcy Cases
The most common motion to dismiss that is filed is in a consumer bankruptcy Chapter 7 case by the United States Trustee’s office for abuse pursuant to section 707(b) of the Bankruptcy Code. While a creditor or other party in interest can also file a motion to dismiss for abuse under section 707(b) it is rare. Procedurally once a Chapter 7 case is filed the Chapter 7 Means Test is reviewed by the United States Trustee’s office and the Chapter 7 trustee assigned to administer the bankruptcy case. If the Chapter 7 trustee finds something that is not quite right they may refer the case to the United States Trustee’s office, or the United States Trustee may look into the case for abuse on their own accord. So what is this abuse term listed above? Basically it means that after putting all of the bankruptcy filer’s information into the Chapter 7 Means Test the bankruptcy filer has disposable income to pay creditors, or the Chapter 7 Means Test includes deductions that are not allowed or proper. The Office of the United States Trustee will most likely make a request to the bankruptcy court for a Rule 2004 Examination of the debtor for more information. The argument, without getting into too much detail, is that the debtor should have filed a Chapter 13 reorganization or Chapter 11 reorganization petition and made some sort of payment to creditors. Why, because they can afford it based upon the calculations and deductions of income and expenses in the Chapter 7 Means Test.
The bankruptcy court may file a motion pursuant to section 707(a) after notice of a hearing and only for cause, including unreasonable delay by the debtor that is prejudicial to creditors. Or for nonpayment of any fees or charges required under chapter 123 of title 28. Chapter 7 trustees also request dismissal of cases if the debtor fails to appear at the 341 meeting of the creditors, fails to cooperate with the Chapter 7 trustee, fails to provide a most recent filed tax return or hid assets or lied to the bankruptcy court about their assets, income or expenses.
For more information about your rights if someone that owes you money filed for bankruptcy protection under Chapter 7, Chapter 13 or Chapter 11 please give us a call at 1-877-963-9543 to schedule a consultation at one of our convenient Bay Area Office Locations.
