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Chapter 13 bankruptcy: what are his alternatives (see details)

Asked by Strauss (23642points) August 2nd, 2013

Another friend has approached me for some advice, and I’d like to get some input from the collective.

It seems this friend made some poor financial choices over the past few years, and coupled with the general state of the economy, found himself in a situation that necessitated his filing of a Chapter 13 bankruptcy. This type of bankruptcy does not allow for liquidation and discharge of debts (as a Chapter 7 would), rather it is a reorganization of debt, administered by a court appointed trustee.

My friend missed two payments, and received a notice of the trustees motion to dismiss, claiming (justly so) that his “failure to comply with requirements…” (etc.) is prejudicial to creditors, and so the bankruptcy case should be dismissed.

His question to me (which I’m passing on to the collective): What are the alternatives?

Would the trustee allow the debtor to make payment to make the plan current? Or would the bankruptcy be dismissed, and all debts considered due? Or can the bankruptcy be converted to a Chapter 7?

I’ve already given what in my humble opinion is my best advice. I wonder if anyone out there has any other advice from experience.

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