Legal Question in Bankruptcy in Tennessee

Dismissing Chapter 13

Brother has been in Chapter 13 for 2 years. Has 1 more year to go. He & wife draw a disability check every month. This is their only source of income. They would like to dismiss Chapter 13 but are curious if the collateral on previous loans filed in bankruptcy will be up for grabs. Also, if they dismiss bankruptcy will the creditors come after them?


Asked on 2/08/01, 10:41 am

1 Answer from Attorneys
James R. Becker, Jr. Becker Law Firm

Re: Dismissing Chapter 13

It is generally going to be a bad idea to dismiss any type of bankruptcy action once filed. The reason for this is simple: your brother will no longer have the benefit of the stay of collection actions and will not have received a discharge of any indebtedness. The filing of a bankruptcy triggers most default provisions in loans. If the bankruptcy is subsequently dismissed, for any reason, the collateral is subject to attack by creditors. It is my experience, as a creditor attorney, that the creditors will certainly go after the amount of the debt.

If your brother has an attorney handling this matter for him, he needs to spend some time talking to that attorney prior to making any decisions along these lines.

Read more
Answered on 3/21/01, 10:14 am


Related Questions & Answers

More Bankruptcy Law questions and answers in Tennessee