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The Chapter 13 Trustee has filed a motion to dismiss my case. What do I do?

 

First of all, don't panic. Nothing happens immediately. Sometimes the Trustee just needs more time, and this is the easiest way to both get your attention and to give things time to work themselves out. If it is something more serious you will alway be given extra time to correct any problems.  

There are two primary reasons for the Trustee to file a motion to dismiss: (1) Failure to make proper payments; and (2) technical defects in your Plan or with your situation. The vast majority of technical defects arise very early in the case. It could be that you have a voluntary payroll deduction that needs to stop, or that a certain creditor was left out of the Plan, or that your Plan's arithmetic does not add up, or that you have failed to turn in copies of one or more of the required documents, or any number of other things. Most of the time these things can be cleared up fairly quickly, but these technical details must be taken seriously, so you must promptly do whatever it takes to resolve that issue. There are technical issues that can come up later in the case, and the more time that passes, the bigger those problems can become, so if you notice anything at all that doesn't seem right let me know right away.

The issue of failure to make payments can come up at any time during the case. The Trustee watches your payments more closely during the first few weeks and months, and if your payments aren't coming in perfectly according to schedule you should expect to see a motion to dismiss. It could be simply that your employer was a little slow getting the payroll deduction started, or waited a few weeks before mailing in the first payment, or is withholding the wrong amount. Those problems are usually easily resolved, but sometimes you have to step in yourself to make sure the Trustee gets at least as much as he or she should, or bring in your paycheck stubs to prove that the money is really coming out of your check. As long as things start working according to plan, the Trustee will step aside and let your Plan be confirmed. But if the problem is not fixed within the first few months, then your case will be dismissed.

Of course, payment problems can crop up at any time during the case. The Trustee still monitors your payments, but once things are up and running well enough in the beginning everyone relaxes a bit and unless something happens we all assume that things will stay on course. Minor hiccups in your payments will be ignored, and we might not notice even a month or more of missed payments, but sooner or later the Trustee will file a motion to dismiss. You may have lost your job, or changed jobs without telling the Trustee, or you might have been injured and off work for a few months. Regardless of the circumstances, as long as you talk to your attorney and show that you are making some effort to correct the problem, the Trustee will give you at least a few more weeks to get things back on track. Quite often your Plan payments will have to increase to make up for whatever you have missed, which is all the more reason not to miss payments if you can help it.

The next most common reason for the Trustee to file a motion to dismiss comes when you are near the deadline for your case to end, but you haven't finished paying everything that must be paid through your Plan. If it's close, and if you are still paying according to schedule, we can always get at least a couple of months added to the end to give you enough time to complete the Plan successfully. But there are times when we have to make some very difficult decisions, such as removing a mortgage or something important from the Plan, or converting to chapter 7, or letting the case be dismissed. Make no mistake about it; in practically every chapter 13 case your best result comes from completing the Plan successfully, so that should always be the primary goal, but sometimes that just isn't realistic.