I received an order saying my chapter 13 Bankruptcy case was being dismissed because it has been over 5 years plus no payments have been made in 6 mos. I lost my job of 7 years around may, 2007. About 1 year prior I had surgery on my knees and couldnt work for about 5 weeks per knee surgery. I did get behind in my payments during this period, but i did not realize that they would dismiss my case because it was over 5 years.
I paid faithfully until these events happenend in my life. I’M a single mother of 2 children and barely make end meat……My question is, now that my bankruptcy has been dismissed I want to know can they come take my car(which i still owe, not sure how much)or will theycontact me and give me the oppurtunity to make arrangements to pay it off? That was the only secured debtor I had on my bankruptcy. Please give me your advise, I cant afford another attorney.
–Melanie
Jonathan Ginsberg responds: Melanie, you may have yourself a big problem. When a Chapter 13 case is dismissed prior to discharge, the protection of the automatic stay disappears and your creditors can pursue all available state remedies available to them. In a Chapter 13, the plan often changes the monthly payment to secured creditors like a car lender. So, for example, if your car payment was $450 per month pre-bankruptcy, and your Chapter 13 trustee paid the lender $300 per month, there is a $150 per month delinquency that is building. If your case goes through to discharge, no problem. But when your case is dismissed the lender will recalculate what you owe based on the contract rate. This may put you hundreds or thousands of dollars behind.
I would suggest that you get on the phone and try to negotiate a payment plan with the lender. If they won’t cooperate you may need to seek Chapter 13 protection again. There are many capable bankruptcy lawyers in the Atlanta area who will file your case for the filing fee only – with no up front payment. Another option – file a Chapter 7 and redeem the property using financing offered by a lender who provides Section 522 funding.