Collections resuming after BK dismissal

[greenthinker]

We are considering getting our Ch 13 dismissed, but first want to consider all of the ramifications.

Once a Ch 13 is dismissed, how long does it typically take for credit card companies to resume collection activities? Assuming that the debts were in default for 6 months or so before the BK was filed, would they immediately file lawsuits? Or, would they first contact us directly?

We would intend to make payment arrangements with them to avert lawsuits and eventually get the debts paid off. But, we would really like a couple of months to pull together an emergency fund before focusing our money on paying down those debts.

[DYLAN150]

I would think you may have a couple of months. No one know's about how long until lawsuits may happen. Maybe soon, maybe never. I had a bankruptcy dismissed years ago and never heard back from some of the creditors at all.

[catleg]

There's a good chance that most of the debts have been sold to third parties by now, check the claims register for your BK case on Pacer.
Whether or not they sue, who knows? Probably not right away, since it's doubtful they have paperwork to back up their claim in court and
they prefer to harass you over the phone (more cost effective). It will all depend on a cost benefit analysis based on the state where you
live and the state where they live. There's one or two JDB's located in Washington state who might be more inclined to sue. (I think one is
called Roundup Financing, kind of like the weed killer LOL).

[GoingDown]

I would think you may have a couple of months. No one know's about how long until lawsuits may happen. Maybe soon, maybe never. I had a bankruptcy dismissed years ago and never heard back from some of the creditors at all.

I would think this would be the most likely case since they probably would think you were insolvent enough to file BK, why bother going after someone like that? At least that's the way I would look at it, if it was up to me to decided whether or not to sue someone.

I would not initiate any contact with them. Let sleeping dogs lie for as long as possible.

[Okieblue]

TY for asking, this is exactly the info I was looking for. Any follow up would be appreciated.

[AngelinaCat]

You will be put right back to square one, as if you had not filed BK at all.

Then on top of that, you will be out of the monies that have already been paid into your plans. Next, delinquency fees and interests accrue over the amount of time that you were in your plans.

Then you get to enjoy ALL OVER AGAIN, the nastygram collection letters and phone calls. You will have NO PROTECTION whatever from your creditors, that was formerly afforded by the protection of BK. And if your creditor decides not to settle on a payment plan, but wants full payment plus penalties and interest, you have NO PROTECTION.

You get to enjoy the creditor lawsuits against you attempting to collect their debt plus penalties, fees and attorney fees. If you are foolish enough to ignore the summons, you get a Default Judgment against you. Then the creditor goes to court and gets a 'Writ of Attachment', or other similar document that lets them seize your vehicle, and /or garnish your wages.

Do your REALLY want this heartache? As bad as you folks think a Ch13 is, it is far preferable to any of the above scenarios. This is just my opinion, but 'Hub and I have been on both sides of this issue.

[doni49]

I would think this would be the most likely case since they probably would think you were insolvent enough to file BK, why bother going after someone like that?

On the other hand, they could look at it and say "they must've asked to dismiss their case for some reason--maybe they came in to some money and don't want to deal with having to ask for permission any more."

[df04527]

Yes agree with Doni .... Most will come back like a slingshot and worse than they were before you filed. I would think long and hard about this. Taking that kind of a gamble is not something i would want to live with everyday unless you've come in to some money to pay everyone off.

[HHM]

There is no "good" scenario when dismissing a chapter 13. The only time you dismiss a 13 is if you can actually pay your debts (e.g. inheritance, won lottery) or convert your case to a chapter 7. The goal of going into BK in the first place is to receive a discharge.

You didn't state whey you want to dismiss, but since your question revolves around what happens, I can only assume you simply want out because you "think" you can work things out...that is NOT going to happen. Mathematically, you generally will OWE more money if you dismiss because creditors get to go back to the date of filing and add back interest and late fees.

Stick it out, it would be a Co-l-o-s-s-a-l mistake to dismiss on a whim to "try and work something out". At this point, all you could do is settle, where is that money going to come from. Your chapter 13 is the "forced settlement" with your creditors and you get to pay it over time...if you dismiss, you wont have that option.

[LadyInTheRed]

TY for asking, this is exactly the info I was looking for. Any follow up would be appreciated.

If you check the OP's other posts, you will see that he/she is still in a 13 and planning to modify the plan to give up an underwater home.

[Okieblue]

No, no, I am convinced beyond a shadow of a doubt that it would be financial suicide to further contemplate this route and since we have children, guess I'll have to sleep in the bed I made.