Thus, creditors, including the IRS, can begin taking action to recover their debt. ![]() Usually, when your Chapter 13 case gets dismissed, the automatic stay is lifted. Depending on the case, the refund may be subject to garnishment under the IRS levy. If you had been working with a bankruptcy attorney, they might claim their professional fees from the dismissal refund. ![]() Therefore, it may take some weeks to get a Chapter 13 refund after your case gets dismissed. The trustee is legally allowed to deduct any outstanding administrative fees the debtor owes before returning the remaining funds. Before returning the money, the trustee should file a comprehensive accounting record with the court. They are also responsible for collecting plan payments, and distributing these funds to the creditors.Īlthough a Chapter 13 trustee is legally allowed to hold any money from the debtor undistributed to creditors, the money returns to the debtor after the Chapter 13 case is dismissed. A trustee is tasked with reviewing all the bankruptcy paperwork, going through the proposed repayment plan to ensure it complies with the bankruptcy laws. The role of the trustee is to represent the debtor estate during the bankruptcy proceeding. ![]() When filing bankruptcy under Chapter 13, the United States Trustee will appoint a bankruptcy trustee to you. Understanding how Chapter 13 dismissal refund works and what debt collector can do Here is a detailed guide on what happens if you don’t follow through with your payment, what to do next, and whether you qualify for a Chapter 13 dismissal refund. Disruption in income, lack of resources, and failure to work with an attorney during the case are common reasons why chapter 13 cases get dismissed.
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