Chapter 13 Bankruptcy - Don't Drag Your Feet!


When you file for Chapter 13 bankruptcy you've got a lot of information to provide to the trustee - papers fly back and forth in a mad flurry, and it's all got to be done in a specific timeframe. A recent New York bankruptcy court decision confirms that if you delay in cooperating with the court or trustee, you could end up having your case converted or dismissed.

Eric Gordon Jensen filed a Chapter 13 bankruptcy case in Manhattan on August 3, 2009. On February 12, 2010, the Chapter 13 Trustee asked the court to dismiss the case because Jensen had been dragging his feet.  In fact, Jensen had not filed documents on time, had not shown up for court when he was supposed to, and did nothing to advance a lawsuit that he claimed would net him enough money to pay his creditors.

Under Section 1307(c) of the U.S. Bankruptcy Code, a court may dismiss or convert a chapter 13 case to case under chapter 7 in 11 circumstances. Subsection (c)(1) provides thata court may dismiss or convert a chapter 13 case to a case under chapter 7 where there has been "unreasonable delay by the debtor that is prejudicial to creditors."

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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