Making the decision to file for bankruptcy is not easy, and is something that requires a considerable amount of thought and planning. However, if you ultimately decide that doing so is in your best interest, working with a Newburg bankruptcy lawyer is critical. As your case progresses, you may wonder if you can stop the filing and go back to the way things were before, for whatever reason. If this is the case, the following blog explores what you should know about whether it’s possible to stop bankruptcy and what your legal options are during these matters are.
Why Might I Need to Stop Bankruptcy?
There are a number of reasons why you may decide that filing for bankruptcy is no longer in your best interest. For example, if your financial situation significantly improves because of an unexpected financial windfall or a new, better-paying job, you may want to stop bankruptcy and pay off your debts outright. However, you may want to reconsider your filing in the event your finances get worse and you can no longer afford your Chapter 13 monthly repayment.
In some cases, you may fully intend and need to file bankruptcy for your financial circumstances, but you may discover that you accidentally filed the wrong chapter. Similarly, you may want to continue the bankruptcy process, but if you need to access an asset protected by your current bankruptcy filing, stopping the case may be your only option.
What Are My Options to Stop My Case?
If you have filed for bankruptcy and need to stop the case for any reason, it’s important to understand that you cannot simply stop the case and undo everything that has occurred.
However, you may be able to dismiss or convert your case. There are two ways to get your case dismissed – by the court’s order or through a voluntary dismissal. While you can voluntarily dismiss a Chapter 13 filing, you cannot do so for Chapter 7 without permission from the judge under exceptional circumstances. When you dismiss the case, you should note that your obligation to repay the outstanding amount of debt will resume, minus any payments made during your active case. Similarly, you can be held responsible for any interest accrued during your filing, making the payments higher.
You should also note that if bankruptcy is dismissed, the automatic stay you were granted will be lifted. This means collectors and creditors can continue collection efforts against you, including lawsuits and foreclosures.
The other option is to convert your case. If you are converting from Chapter 13 to Chapter 7, you must ensure you can pass the means test first. This examines whether or not your income is below the average for other similar-sized households in New York. Most convert their Chapter 13 case to Chapter 7 if they can no longer make payments as necessary for their repayment plan. This allows you to obtain relief, but you may have to sacrifice non-exempt assets.
As you can see, this process is incredibly difficult to navigate. If you have filed for bankruptcy and need to stop the process, connecting with an experienced attorney for advice specific to your circumstances is imperative. When you need help, contact the Law Offices of Michael D. Pinsky, P.C., for assistance in these matters.
