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What happens if my chapter 13 case gets dismissed?


In some ways it’s as if your case had never been filed, but time has still gone by. You should get credit for any payments that the Trustee made to your creditors during the plan, but any creditors that was not paid in full can take any legal collection action, such as lawsuits, garnishment, eviction and foreclosure.* They can go back to the date you filed and recalculate any penalty and interest that they could have charged during all that time. In most cases, you can file a new Chapter 13 case and start over, but you will still be stuck with all of that extra interest, etc. It is almost always better to save your existing case than to dismiss and refile, but still, there are times when dismissing is the right thing to do, or at least the only realistic option.

*(Unless they already had permission from the Bankruptcy Court, the mortgage company has to start the foreclosure process all over again, so it will take at least one month for them to get back to the foreclosure sale.)