Dismiss Or Convert A Bankruptcy Case, Can The Debtor Voluntarily Do This?
A) Voluntary Dismissal – A debtor can file a motion to voluntarily dismiss the bankruptcy case, but the court may or may not approve the dismissal depending upon the chapter number of the bankruptcy case and the prior history of the debtor in bankruptcy. IMPORTANT NOTE: Dismissal of a bankruptcy case has serious consequences. For example, if a bankruptcy case is voluntarily dismissed, it may affect a debtor's rights to the Automatic Stay in a future bankruptcy case. It is highly recommended to consult a bankruptcy attorney.
Chapter 7 – See Bankruptcy Code Section 707 – Because a trustee is appointed, the trustee may file an objection to a request for voluntary dismissal, and a hearing is required.
Chapter 11 – See Bankruptcy Code Section 1112 – A debtor's request to dismiss requires a motion and an opportunity for a hearing.
Chapter 13 – See Bankruptcy Code Section 1307 – A debtor has a right to dismiss its Chapter 13 bankruptcy case if the bankruptcy began as a Chapter 13 case, but the court may place restrictions on a debtor's ability to file a subsequent bankruptcy case.
B) Voluntary Conversion to Another Chapter – A debtor can file a motion to voluntarily convert its case to a case under a different bankruptcy chapter. IMPORTANT NOTE: When any bankruptcy case is converted, there are new responsibilities and deadlines for filing case commencement documents, and the debtor must attend a new 341(a) meeting of creditors. It is highly recommended to consult a bankruptcy attorney about the impact of converting a bankruptcy case.
Chapter 7 – See Bankruptcy Code Section 706.
Chapter 11 – See Bankruptcy Code Section 1112(a).
Chapter 13 – See Bankruptcy Code Sections 1307(a) and 1307(g).
To convert a Chapter 13 case to a Chapter 11 bankruptcy case, the debtor must file a motion and schedule a hearing for the court to rule on its motion.