As we’ve discussed many times on this blog, there is legislation in the pipeline that if passed could help homeowners modify toxic loans in Chapter 13 bankruptcy. Many homeowners considering Chapter 13 bankruptcy are wondering if they should wait until the new law is passed before they file for Chapter 13 bankruptcy. The simple answer is most likely NO. Most debtors who are considering Chapter 13 bankruptcy are currently overwhelmed with debt and often face urgent issues such as wage garnishments and judgments so they should not delay filing their Chapter 13 bankruptcy to put a stop on creditors’ aggressive collection practices. However, a debtor who has filed for Chapter 13 bankruptcy can still take advantage of a new Chapter 13 bankruptcy law by dismissing and refilling their case with the bankruptcy court.
There are some rules that need to be followed in order to dismiss your Chapter 13 bankruptcy case and refile it to take advantage of a change in the law; but working with a professional bankruptcy attorney can help you navigate the system. One thing you should keep in mind is that if you have already filed and dismissed a bankruptcy case within the past year, you should speak to a professional bankruptcy attorney to find out the possible implications of doing it again.