Can I Cancel a Bankruptcy?
Canceling a Bankruptcy is also known as a voluntary dismissal. For the remainder of the blog, we will reference it as such. Voluntarily dismissing a bankruptcy case is not always simple—and the rules differ dramatically depending on whether you filed under Chapter 7 or Chapter 13. The Bankruptcy Code sets out strict requirements, and courts closely examine whether dismissal is fair, lawful, and in the best interests of both debtors and creditors.
Below is a clear explanation of how voluntary dismissal works, key case law, and important procedural rules you should know before trying to dismiss your bankruptcy.
Voluntary Dismissal (Cancellation) in Chapter 7: No Automatic Right to Dismiss (Cancel)
Many people are surprised to learn that Chapter 7 debtors do not have an automatic right to dismiss their case or cancel their Chapter 7 bankruptcy case.
Once a Chapter 7 petition is filed, the case belongs to the bankruptcy estate, and the court—not the debtor—controls whether it can be dismissed.
Statutory Standard: Cance/Dismissal Only “For Cause”
Under 11 U.S.C. § 707(a), a Chapter 7 case may be dismissed:
Only after notice and a hearing, and
Only for cause.
“Cause” is not defined in the statute, so courts decide it on a case-by-case basis. Courts look at:
Whether dismissal would prejudice creditors
Whether the debtor is acting in good faith
Whether dismissal is in the best interests of all parties
(In re Elmore, 668 B.R. 122 (2025); In re Hopper, 404 B.R. 302 (2009))
Good Faith Matters
Courts scrutinize why the debtor wants to dismiss.
For example, dismissal may be denied if:
The debtor filed for the benefit of the automatic stay, but now wants out because the case has become inconvenient
There are unresolved concerns about the debtor's transfers, disclosures, or honesty
(In re Herrera, 554 B.R. 262 (2016))
If Creditors are Harmed, you Cannot Dismiss/Cancel
The debtor must prove that creditors will not be harmed. If dismissal would:
Block the trustee from selling assets
Allow the debtor to refile strategically
Interfere with creditor recovery
the court will likely deny the request.
(In re Bartee, 317 B.R. 362 (2004); In re Kapsos, 18 B.R. 88 (1982))
Bottom Line:
If you're in Chapter 7, you cannot dismiss your case just because you want to. You must show good cause—and the court decides whether dismissal is fair.
Voluntary Dismissal (Cancellation) in Chapter 13: An Absolute Right—With Limits
Chapter 13 is very different.
Under 11 U.S.C. § 1307(b), a Chapter 13 debtor has an absolute right to dismiss their case at any time, so long as the case has not previously been converted.
Courts have repeatedly confirmed that dismissal under §1307(b) is mandatory:
The court shall dismiss the case upon the debtor’s request.
(In re Powell, 119 F.4th 597 (9th Cir. 2024); In re Sun, 2025)
Even Bad Faith Does Not Remove the Right
A debtor's motivation—good or bad—is irrelevant to the court’s obligation to dismiss the case.
However…
Courts Can Impose Conditions When Dismissal Is Abusive
Even if you can cancel or dismiss your Chapter 13, bankruptcy courts may attach conditions to the dismissal order to prevent abuse of the system. Courts may:
Limit the automatic stay in future cases
Dismiss the case with prejudice
Bar refiling under § 349(a)
Impose sanctions for bad-faith conduct
(In re Corben, 667 B.R. 791 (2025); In re Wyatt, 317 B.R. 159 (2004))
Important Warning: 180-Day Refiling Bar
Under § 109(g)(2), a debtor who voluntarily dismisses their case after a creditor obtains relief from stay cannot file again for 180 days.
This bar applies regardless of good faith.
This rule prevents abuse—such as filing and dismissing repeatedly to stop collection.
Procedural Requirements for Voluntary Dismissal
Chapter 7
Requires notice and a hearing
Creditors, trustees, and the U.S. Trustee may object
Debtor must prove “cause”
Chapter 13
Debtor must file a request for dismissal
Right to dismiss cannot be waived
Court may impose conditions to prevent abuse
Chapter 11 or Adversary Proceedings (Objections to Discharge)
Dismissing an adversary complaint or Chapter 11 (e.g., an objection to discharge under §727) often requires:
A scheduled hearing
Notice to all creditors, the trustee, and the U.S. Trustee
Disclosure of any agreement or consideration for dismissal
(Example: E.D. La. Rule 7041-1)
This prevents secret settlements that could hurt creditors or undermine the integrity of the system.
Why Would a Debtor Want to Dismiss?
Debtors commonly seek dismissal to:
Stop liquidation in Chapter 7
Refile under Chapter 13 to save a home (but a conversion may be more applicable, depending on your situation)
Avoid pending trustee actions
Remove themselves from bankruptcy oversight
However, courts will not allow dismissal if it's used to manipulate the system or avoid consequences.
Conclusion: Understanding Your Rights Before Requesting Dismissal
Voluntary dismissal rights differ significantly between Chapter 7 and Chapter 13:
Chapter 7
No automatic right to dismiss or cancel
Must prove “cause”
Court can deny dismissal if creditors would be harmed or if the debtor is acting in bad faith
Chapter 13
Absolute right to dismiss or cancel
Court must grant dismissal
But the court may impose conditions to prevent future abuse
A 180-day refiling bar may apply if the debtor previously faced stay relief
Courts aim to balance fairness, creditor protection, and preventing abuse of the bankruptcy process.
If you are considering dismissing your bankruptcy case, it’s crucial to understand the consequences, risks, and procedural requirements.
Frequently Asked Questions (FAQ)
Can I change my mind after filing bankruptcy?
Yes, but your rights depend on the chapter. Chapter 13 allows dismissal on request; Chapter 7 requires court approval.
Can the trustee stop me from dismissing Chapter 7?
Yes. If dismissal hurts creditors or looks suspicious, the trustee may object—and courts often side with the trustee.
Can I immediately refile after dismissal?
Generally yes, except:
A 180-day bar may apply under §109(g)(2)
Courts may impose a prejudice period if dismissal was abusive
Is dismissing a bankruptcy a bad idea?
Sometimes. Dismissal may:
Restart collections
Allow creditors to resume garnishments
Forfeit the protection of the automatic stay
Lead to denial of discharge in future cases
Always consult an attorney before requesting dismissal.
Need Help with Dismissing a Bankruptcy Case? Contact Bankruptcy Near Me
If you're thinking about dismissing your bankruptcy case, the consequences can be serious. Before you take any action, speak with an attorney who handles Chapter 7 and Chapter 13 cases every day.
At Bankruptcy Near Me, we help clients in both Maryland and California understand their options and make the right decision.
📍 Maryland Office (Kensington, MD)
📞 301-550-5408
🧑⚖️ Named Best Maryland Bankruptcy Attorney: Iris Kwon
📍 California Office (Santa Ana, CA)
📞 714-798-2544
🧑⚖️ Named Best California Bankruptcy Attorney: Iris Kwon