New Ruling: Cases No Longer Automatically Dismissed Without a Hearing

Posted on Jun 22, 2018

A recent ruling by the Fourth Circuit found that Local Bankruptcy Rule 3070-1(c)'s procedure for dismissal of a voluntary bankruptcy case conflicts with the notice and hearing requirement of 1307 of the Bankruptcy Code.  This Local Bankruptcy Rule 3070-1(C), which states that a Trustee shall submit a Certificate to the Clerk who, upon receipt, shall enter an order of dismissal. Based on this local rule, cases were being dismissed without a hearing, which is inconsistent with the Bankruptcy Codes Hearing requirement.

What does this mean for someone in bankruptcy?

Before this local ruling, if a debtor did not show up to their 341 meeting their case would be automatically dismissed via a Certification sent to the Court. Now, if a Debtor fails to appear for their meeting, the Trustee will still file a Certification with the Court, but the Court will not automatically dismiss the case upon receipt of the Certification. 

The Trustee must now file a Motion to Dismiss after submitting a Certification to the Court and the matter will be resolved with a hearing. 

This doesn't mean that the court won't still dismiss your case, but to put it simply you get your chance to be heard instead of having your case automatically dismissed. 

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