Here is a question that some attorneys ask about chapter 7 bankruptcy:
Debtor filed Chapter 7. It turned out that her home, after taking the excemption, is worth more than anticipated by “drive by” appraisal by realtor-friend. So she wants to dismiss her petition to avoid the Trustee messing with her home. Can this be done? Do you expect an objection from the Trustee? What is the best way to get out of this altogether?
The answer is this:
The Debtor does not have an absolute right to dismiss her Chapter 7 Petition. See In re
Cohara, 324 B.R. 24, 27 (BAP 6th Cir. 2005), citing In re Barten, 317 B.R. 362, 366 (BAP 9th Cir.2004). In general, if creditors are prejudiced in any respect by the dismissal or if the trustee has acquired funds for distribution, a request by the debtor for dismissal will be denied. In re Harker,181 B.R. 326, 328 (Bankr. E.D. Tenn. 1995). The debtor has the burden of showing cause for dismissal. The core issue in determining whether the debtor has established cause is whether the dismissal will prejudice the creditors. Cohara, 324 B.R. at 28; In re Stephenson, 262 B.R. 871, 874
(Bankr. W.D. Okla. 2001).
This article is not meant as legal advice, and Bankruptcy is very complicated depending on every persons overall financial situation. So, if you are considering any chapter of the bankruptcy code, is it called one of our attorneys for a free, same day consultation.
To learn more about Chapter 7 or Chapter 13 Bankruptcy, the federal government has excellent information about it on their website at http://www.uscourts.gov/services-forms/bankruptcy
Fairmax Law™ is a Service of Jaafar Law Group PLLC and is a designated debt relief agency that helps clients file bankruptcy under the federal bankruptcy code.