Common reasons a Chapter 13 Trustee will file a Motion to Dismiss my Chapter 13 Case.
In a Chapter 13 bankruptcy, the trustee may file a motion to dismiss your case under several circumstances, typically when the debtor fails to comply with the terms of the repayment plan or other legal requirements. Here are some common reasons:
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Missed Plan Payments: If you fail to make the required monthly payments to the trustee on time, the trustee may file a motion to dismiss. Consistent and timely payments are essential in a Chapter 13 case.
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Failure to Submit Required Documents: Missing or incomplete documentation—such as tax returns, income statements, or other financial disclosures—can lead to dismissal if not resolved in a timely manner.
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Lack of Feasibility: If the repayment plan is deemed "not feasible" (meaning you do not have enough income to make the proposed payments), the trustee may file a motion to dismiss. This can occur if there are changes in your income or expenses that affect your ability to meet the plan terms.
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Non-Compliance with Court Orders: Failing to comply with any specific court orders or directives issued during the Chapter 13 process can lead to dismissal. For example, if you are ordered to turn over tax refunds or address certain secured debts and fail to do so, the trustee may take action.
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Failure to File or Pay Taxes: Chapter 13 filers must remain current with tax filings and payments. If you miss filing a return or paying taxes, this could prompt a motion to dismiss.
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Incurring New Debt Without Permission: In Chapter 13, you generally cannot take on new debt without court approval. If you do so without permission, it could jeopardize your case.
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Failure to Pay Domestic Support Obligations: If you have obligations such as alimony or child support, you must keep those current throughout the Chapter 13 process. Falling behind on these payments can lead to dismissal.
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Unreported Changes in Financial Situation: If your income changes significantly and you do not report it, the trustee may see this as non-compliance, potentially leading to a motion to dismiss.
If you receive a motion to dismiss, you will usually have a chance to address the issues and work with the trustee or the court to keep your case on track.