Can I dismiss a chapter 7 bankruptcy? 23 Answers as of August 10, 2011

We were planing on paying our debt off with a automobile accident lawsuit judgment that was suppose to pay out years ago. We got too far in the hole and had to file chapter 7, the trustee meeting was last week. We just found out our settlement paid out. My question is can we dismiss the chapter 7 at this point?

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Advanced Litigation Services
Advanced Litigation Services | Joseph Iarussi
Yes you could dismiss the case, but you should re-think that. The Settlement is exempt property, and you could get a fresh start by eliminating your debts with a discharge from the court
Answer Applies to: Nevada
Replied: 8/10/2011
The Northwest Debt Relief Law Firm
The Northwest Debt Relief Law Firm | Thomas A McAvity
I doubt it, your Chapter 7 trustee will want to distribute those funds herself to your creditors. Failure to report the distribution to the Trustee would be an absolute disaster.
Answer Applies to: Oregon
Replied: 8/9/2011
Lake Forest Bankruptcy
Lake Forest Bankruptcy | Anerio V. Altman, Esq.
No. Depending upon the amount of money paid out, you may be able to keep some if not all of the money you are receiving. If you didn't disclose the money, consult an attorney first before you do anything in court.
Answer Applies to: California
Replied: 8/9/2011
Law Office of Michael Johnson
Law Office of Michael Johnson | Michael Johnson
No the settlement needs to go to the trustee.
Answer Applies to: Florida
Replied: 8/9/2011
Breckenridge and Walton
Breckenridge and Walton | Alan D. Walton
You have to get court permission to do so, but the Trustee will likely fight it, since his job is to take unprotected assets like some of your settlement, and pay claims. And so what if he does? - your creditors will be paid - and you will get a discharge from those who do not file claims. You have to disclose the settlement, and exempt what you can from it. If you did not list the possibility in your schedules, then the court might consider you desire to dismiss to be a bad faith request and deny it.
Answer Applies to: Michigan
Replied: 8/9/2011
    Eric J. Benzer, Attorney at Law
    Eric J. Benzer, Attorney at Law | Eric Benzer
    Often, yes
    Answer Applies to: Maryland
    Replied: 8/9/2011
    Bankruptcy Law office of Bill Rubendall
    Bankruptcy Law office of Bill Rubendall | William M. Rubendall
    To dismiss a chapter 7 you need to file a motion. The motion must state a reason. It also must state that the creditors will not be prejudiced. It is not easy to dismiss a chapter 7.
    Answer Applies to: California
    Replied: 8/9/2011
    Heupel Law
    Heupel Law | Kevin Heupel
    Unfortunately, you do not have the automatic right to dismiss a Chapter 7. You have to have good cause and your situation is not as the trustee for the bankruptcy court now has the right to take the auto accident proceeds and pay the debts for you.
    Answer Applies to: Colorado
    Replied: 8/9/2011
    Law Office of Maureen O' Malley
    Law Office of Maureen O' Malley | Maureen O'Malley
    Unlikely. If you do, the US Trustee will want to see receipts showing you paid the debts listed in Ch. 7. An attorney could have helped avoid this.
    Answer Applies to: Virginia
    Replied: 8/9/2011
    Judith A. Runyon, Esq. Attorney at Law
    Judith A. Runyon, Esq. Attorney at Law | Judith A. Runyon
    Not likely. Your have to have the Ch. 7 Trustee's permission to do so, but he/she will probably demand the personal injury funds come into your bankruptcy so they can pay your debts off in the bankruptcy.
    Answer Applies to: California
    Replied: 8/8/2011
    Carballo Law Offices
    Carballo Law Offices | Tony E. Carballo
    Yes.... you will need to file a motion to dismiss the case. Unless you have unprotected assets (non-exempt assets) the trustee will probably not oppose the motion.
    Answer Applies to: California
    Replied: 8/8/2011
    Edward Papa, Esq.
    Edward Papa, Esq. | Edward Papa
    Assuming you filed pro/se then did you list the lawsuit in the SOFA ? Did you exempt the future proceeds ? Did you mention it at the 341 hearing when the Trustee asked you about any pending lawsuits ? You should engage an attorney now before you screw this up any further.
    Answer Applies to: New York
    Replied: 8/8/2011
    Bird & VanDyke, Inc.
    Bird & VanDyke, Inc. | David VanDyke
    Probably not. You would have to file a motion and obtain the trustees permission.
    Answer Applies to: California
    Replied: 8/8/2011
    Goldsmith & Guymon
    Goldsmith & Guymon | Marjorie Guymon
    You cannot dismiss your case without filing a motion and asking the court for permission to do so. The grounds to dismiss would be that it is better for your creditors to dismiss than to allow the trustee to administer the settlement funds to the creditors. As you can imagine, that is a difficult burden to meet. You do have an exemption of $16,000 in a personal injury settlement under Nevada law, so make sure you assert you are entitled to that amount.
    Answer Applies to: Nevada
    Replied: 8/8/2011
    Janet A. Lawson Bankruptcy Attorney
    Janet A. Lawson Bankruptcy Attorney | Janet Lawson
    Nope..... Chapter 7 is like a cave with no way out when you have assets. Only possible option is to convert to Chapter 13 to avoid the Chapter 7 Trustees fees - but expect a "bad faith objection." Since it is a liquid asset the fees won't be huge.... they are based on a percentage of what the trustee pays out. If you do not have a lawyer you better get one now - at least to figure out what this will cost and to review your exemptions.
    Answer Applies to: California
    Replied: 8/8/2011
    Law Offices of Michael J. Berger
    Law Offices of Michael J. Berger | Michael J. Berger
    Only the bankruptcy court judge can dismiss a Chapter 7 case. You do not have an absolute right to have your case dismissed. If you want to have your Chapter 7 bankruptcy case dismissed, you may file a Motion to Dismiss. The judge ruling on your motion must decide if dismissal is in the best interests of your creditors. If your bankruptcy is now an asset case and creditors would get paid if you remained in Chapter 7, but would not get paid if your case was dismissed, the judge may decide that dismissal is not in the best interests of your creditors.
    Answer Applies to: California
    Replied: 8/8/2011
    The Port Law Firm
    The Port Law Firm | Edward Port
    The lawsuit should have been disclosed in the filing of the bankruptcy. As you are in Florida, the lawsuit (personal injury) proceeds would be part of your bankruptcy. This means that your Trustee has a right to claim the proceeds to pay off your debt. As such, the Trustee would most likely object to the dismissal of your case and request the proceeds be paid directly to the Trustee or the trustee could move to file a motion for turnover of the proceeds.
    Answer Applies to: Florida
    Replied: 8/8/2011
    Charles Schneider, P.C.
    Charles Schneider, P.C. | Charles J. Schneider
    It is doubtful that you will be able to as a Judge may determine that it would not be in the interest of the creditors. This will be the argument of the Chapter 7 Trustee who also gets a commission on the assets and can hire his own law firm to assist in administering the asset. The Trustee will be motivated to keep you in and he will also argue that his goal is compatible with yours.
    Answer Applies to: Michigan
    Replied: 8/8/2011
    Law Office of J. Thomas Black, P.C.
    Law Office of J. Thomas Black, P.C. | J. Thomas Black
    You should talk to your lawyer. You have no absolute right to dismiss a chapter 7 case, you must show "cause" to do so, and it can only be done after notice to all parties in interest and an opportunity for them to request a hearing. See 11 U.S.C. Sec. 707(a). It is up to the discretion of the Bankruptcy Court whether or not to allow you to dismiss a chapter 7 case, and it will not ordinarily be allowed simply because you no longer wish to be in chapter 7, or because you suddenly realize that you have non-exempt assets. That is what a chapter 7 trustee is for, is to take charge of, liquidate and distribute non-exempt assets, such as a lawsuit settlement. At the very least, your lawyer will have to give notice to all the parties in the case, and explain that you intend to pay all your debts. The court may require you to reimburse the Trustee for any expenses that he or she has incurred so far.
    Answer Applies to: Texas
    Replied: 8/8/2011
    Ross Smith, Attorney at Law
    Ross Smith, Attorney at Law | Charles Ross Smith III
    Sorry, no. However, Payments for the loss of future earnings and wrongful death are usually 100% exempt from the trustee. Wrongful death awards also. Payments for personal injury are exempt up tpo $21,625.00. Your attorney should be able to help yopu sort out whats what. And the trustee will be surprisingly helpful also, if you are up front and honest with the trustee. Good luck.
    Answer Applies to: Ohio
    Replied: 8/8/2011
    Law Office of Lynnmarie A. Johnson
    Law Office of Lynnmarie A. Johnson | Lynnmarie Johnson
    No, there is no automatic right to dismiss a Chapter 7 bankruptcy. You will need to report to the trustee that the matter has been settled and paid out and then you can try and work a settlement with the trustee or convert to a Chapter 13 if appropriate.
    Answer Applies to: Michigan
    Replied: 8/8/2011
    The Schreiber Law Firm
    The Schreiber Law Firm | Jeffrey D. Schreiber
    Probably not without the consent of the Chapter 7 trustee.
    Answer Applies to: California
    Replied: 8/8/2011
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