In some Georgia Chapter 13 bankruptcy cases, people fall behind on their payments to the Chapter 13 trustee due to cutbacks in hours at work, loss of job, medical reasons and so forth. When this happens, the bankruptcy trustee will file a motion to dismiss the case.
Most of the time in Northwest Georgia, we can work out a deal with the Chapter 13 bankruptcy trustee to either increase the payments to make up for lost time and/or agree to a strict compliance period for the case. Strict compliance means you can’t miss anymore payments to the trustee or your case will be dismissed without a hearing before the judge. In some cases, the client gets so far behind they cannot afford an increase in payments and the case gets dismissed. Another example is when someone has lost their job and has not found a new one before the motion to dismiss is heard before the judge.
When the client has recovered from the cause of the dismissal of the Chapter 13, we can refile the case. We have to sit down and review the entire bankruptcy petition just like we did for the first bankruptcy. Once the documents for the new bankruptcy have been signed, we refile the case so that the client has bankruptcy protection once again. However, in the second case, we must file a Motion to Extend the Stay. A hearing on this motion must be held within 30 days of the filing of the second case. If no hearing takes place, the bankruptcy protection ends.
In the motion, we must explain to the judge what went wrong in the last case and why this new case is different. For example, if hours were decreased in the last bankruptcy but work has now picked back up, the judge will likely grant the motion. If the last case was dismissed because the client lost their job and the new bankruptcy is filed before the client finds a new job, the motion will not be granted. The cause of dismissal in the last case has not been rectified. I will not ever refile a Chapter 13 unless I am confident the client is going to be able to make the second case work.
Having two Chapter 13 cases dismissed within the last year puts a person in a bad spot. Anyone who has had two Chapter 13 cases dismissed within the last year will not have any bankruptcy protection at all in the third case until a motion is filed with the court and an order is entered granting protection. As a general rule, I don’t take Chapter 13 cases when someone has already had two cases dismissed within the last year.