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Motion to Vacate Dismissal of Bankruptcy Case



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In San Francisco, CA, the US Bankruptcy Court, Northern District of CA is located at 235 Pine Street, walking distance from public transportation. When a debtor files a bankruptcy petition and does not move the case along like not showing up for the 341 Hearing or not submitting all required documents to the trustee for review, the court may dismiss the case.

When a court dismisses a case, the debtor may try to revive the case with a Motion to Vacate Dismissal. In this motion, the debtor may explain reasons for not following court rules or moving the case along. For instance, the debtorís attorney may suffer sudden illness, preventing the debtor from submitting necessary documents to the trustee. When a debtor files a motion in San Francisco, CA, the court sets the matter for hearing, but prior to the day of the hearing, the judge may issue a Tentative Ruling. A Tentative Ruling is meant to save time on the day of the hearing. Since other cases are scheduled at the same time, if a debtor agrees with the Tentative Ruling s/he does not need to show up at the hearing. The court adopts the Tentative Ruling, allowing more time for other cases on the calendar.

A judge may deny a motion to vacate bankruptcy dismissal according to Bankruptcy Code Section 521(i)(1), which mandates dismissal when required documents are not filed within 45 days of a petition filing. According to this Bankruptcy Code Section, dismissal is automatic, and may not be set aside by the court. When filing a motion to vacate bankruptcy dismissal, a debtor needs to cite legal authority such as case law for the proposition that an automatic dismissal can be revisited. For example, Warren v. Wirum, 568 F.3d 1113 (9th Cir. 2009) offers limited relief from statute under certain circumstances. In this case, the trustee sought relief to dismiss the case for missing debtor information before expiration of a 90 days waiting period from petition filing.

When a debtor is not able to vacate a bankruptcy dismissal, the debtor goes back to the same position held prior to the bankruptcy filing, with creditors being able to go after him/her for the full amounts of debts. The court lifts the automatic stay. The debtor may file a new Chapter 7 bankruptcy case, but needs to pay the court costs again. The court may ask the attorney who worked on the original filing to disgorge all fees so the debtor can find a new attorney, or if the debtor decides to stay with the same attorney, the court may ask the attorney to file the new Chapter 7 case without charge.

ABOUT THE AUTHOR: Marc Fabito, Esq. - Protect Law Group
Some of ProTecT Law Groupís Attorneys are admitted to multiple state bars throughout the U.S., to the United States Tax Court and to the United States District Court. ProTecT Law Group Attorneys have honed their skills and competence by obtaining advanced degrees, serving on arbitration panels, and receiving special training in litigation, tax, negotiations and restructuring.

Copyright Marc Fabito, Esq. - Protect Law Group
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Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer. For specific technical or legal advice on the information provided and related topics, please contact the author.