Chapter 13

• A Chapter 13 filing allow you to develop a plan to repay all or part of your debt if you have a regular source of income. Chapter 13 is available to all individuals, including self-employed people. However, neither companies nor corporations can file for Chapter 13. In a Chapter 13 filing, the court gives you a period of time in which you must pay off your debts, or at least most of them. If your income is higher than the average income of your state, the court generally gives you five years to pay your debts. If your income is lower, you usually have three years to make payments. You make payments to the case trustee who divides your payments among your creditors always paying secured debts first.
  
  

Reasons for Dismissal

• The court will dismiss your case if you fail to follow any of the rules the court gives or any of the court orders that you receive. You may also receive a dismissal if you miss the creditor meeting, if you fail to appear in court when you must appear, or if you fail to make your payments. If the court declines to confirm your repayment plan -- a plan you create to show how you intend to pay your debts -- you can file a modified plan. If the court does not approve your modified plan, the court will dismiss and close your case.
  
  

After Dismissal

• Receiving a dismissal means that your case is over and the court does not approve it. Your creditors are legally free to demand payment and start collection actions against you. You may try to make a deal with your creditors. However, although a dismissal means that the court has closed your case, it does not mean that you cannot file again. Once 180 days elapse from the time you received the dismissal, you can file again. You can choose to again file for Chapter 13, or, if you qualify, file for Chapter 7, which erases your debts.
  
  

Considerations

• Receiving a dismissal does not help your debt problems. On the contrary, it only makes them worse by allowing your creditors to start collection actions against you. One of the options you can choose to deal with the consequences of your dismissed case is to sell your property and assets, and try to pay some of your creditors back with the money you raise. Whichever option you choose, a dismissal creates a problem, since you cannot file again for bankruptcy for another 180 days. For this reason, your best option is to avoid a dismissal.