Chapter 13 Dismissal

Letter to “Ask Leon”

We have been in 13 for about 1-1/2 years. Our home in MS was under foreclosure when we filed. I was transferred and am forced to sell the house. We have a contract on the house. Our lawyer told us initially that if the equity was less than $75,000, we would keep the proceeds (which we need to purchase a house in our new location). Now, he is saying all the proceeds will go to the bankruptcy payoff. We will have no credit, no down payment for another house. A lawyer in our new area told me to dismiss the bankruptcy, sell the house, then redo the bankruptcy. Can I sell the house if it goes back into foreclosure which I understand will happen? Oh, BTW, getting an answer out of my bankruptcy lawyer is like pulling teeth and getting a correct answer is next to impossible – he has caused us nothing but trouble due to his incompetence. I have complained to the trustee several times about him.

Leon Says…

I am sorry to hear about this. I get very disturbed when lawyers fail to adequately represent their clients. If consumers would get pushier, the bad apples can be forced out of the profession.

Get yourself another attorney in MS immediately. Frankly, I think the idea of dismissing is scary. Don’t you need the BK to keep the foreclosure from taking place? If you dismiss, you might lose the property in foreclosure before you close the sale! Whether or not all proceeds of a sale must go to the BK court depends on too many different factors for me to analyze them for you from long distance. As for your lawyer, you can file a complaint with the state bar association in your state, and you can also write a letter to the judge complaining about the inadequacy of the lawyer and ask that the local bankruptcy court have its disciplinary committee hear your complaint.