This is called a "cramdown" of the car loan. For instance, Chapter 13 plans can lower the interest rate on a car loan and reduce the principal amount to the value of the collateral. When the case is dismissed, those creditors stay with you.Īny changes the court made to the terms of a debt in your Chapter 13 case will be reversed. Everything you owed before the bankruptcy, you'll owe after (except for amounts applied from any plan payments you did make.) Often, creditors don't bother to file claims with the bankruptcy court, and their debts get discharged. Your debts are discharged in Chapter 13 only when you complete your plan, which can last three to five years. When your bankruptcy case is dismissed, you lose benefits and could be left worse off than before you filed your Chapter 13 case. What Happens After Your Bankruptcy Case is Dismissed? The exact terms of the dismissal will depend on the court's order. If the court dismisses your bankruptcy with prejudice, you might be unable to file another bankruptcy for a specified amount of time, often six to twelve months, or discharge the debts included in your first filing. Most cases are dismissed without prejudice, and you can file another bankruptcy immediately.īut if you acted in bad faith or otherwise abused the bankruptcy process, the court can dismiss your case with prejudice. If the court dismisses your Chapter 13 bankruptcy, it can do so with or without prejudice. Read When You Can't Make Your Chapter 13 Payments to learn more.
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