What are the pro's and con's of a voluntary dismissal of a Chapter 13 case?

Answer 1

This question is so dependent on individual facts and circumstances that it defies a thorough answer, but I will make some general statements that are hopefully helpful: One "con" of voluntary dismissal is that the creditors who were not paid in full during the case will come back after the debtor. This is a pretty substatial "con." Another "con" is that the Chapter 13 is already on the debtor's credit report for 7 years even if the debtor dismisses it voluntarily. A big "con," which is highly situational, is that if a case is voluntarily dismissed after a Motion for Relief from Stay has been filed, that debtor is automatically barred from re-filing a new case for 180 days (6 months) (pursuant to 11 U.S.C. 109(g)). So, if a creditor, let's say the mortgage company, files a Motion for Relief from Stay to sell the debtor's house because the debtor has missed some mortgage payments, and the debtor voluntarily dismisses his or her Chapter 13, that debtor cannot re-file a new case for 6 months. This 6 month period of no bankruptcy protection may be sufficient time for the creditor to sell the home in a foreclosure action. A "pro" of dismissal might be, depending on the circumstances, that the debtor could re-file a new Chapter 13 and include debts that were incurred after the filing of the first Chapter 13 (and it should be noted that post-petition debts can normally be added to an existing Chapter 13 without dismissal if the case is converted to Chapter 7 by filing a Schedule of Post-Petition Debts). Please note that nothing in this posting or in any other posting constitutes legal advice; this is simply my understanding of the facts, which I do not warrant, and I am not suggesting any course of action or inaction to any person.