Expert: Mark J. Markus- California Bankruptcy Attorney - 1/13/2009

Question
Just received via mail today that our Chapter 13 had been dismissed for non-payment.  Prior to this, we have had several late payments and court dates which were dismissed and allowed us to continue making payments.  This time, it has been dismissed by the court.  My husband is no longer employed (he was employed at filing) and my daughter whom is not living with us has had many brain surgeries within the past year and it seems as though we have just got ourselves into a place we didn't intend to be.  I can no longer make the payment and we are three years within the chapter 13.  What will happen at this point?  We have since purchased a home through USDA and are making payments.  I don't know how we obtained this loan as I know you are not suppose to obtain any new debt while in bankruptcy.  Non the less, what is our recourse at this time?  As I stated, I am the only one working and my husband was forced into early retirement due to a car accident by no fault of his own.  He is now drawing disability.  
Thank you for any help you have to offer.
Kathy

Answer
Well, it depends on why you filed a Chapter 13 case to begin with.  If the reason was excess income, then if that has changed, you could have either done a Motion to Modify your Plan or, probably better convert your case to Chapter 7.   In any event, now that your case is dismissed, your creditors can pursue you as they could before the bankruptcy.  If you still need a discharge you need to have your case evaluated and decide whether you can file a Chapter 7 case now, or maybe refile a new Chapter 13 (if there were other reasons for that, like excess equity in assets).