Discharge and Dismissal in Chapter 13

Discharge in Chapter 13 is an Uphill Climb
For most people, most of the time, getting a discharge is the goal of a bankruptcy case. The Supreme Court put it this way.  “The principal purpose of the Bankruptcy Code is to grant a ‘fresh start’  to the ‘honest but unfortunate debtor.’ ” The discharge means the debts are gone.
About half Chapter 13 cases end up dismissed
Nationally, in Chapter 13, only about half the cases get a discharge. The other half get dismissed.
Here in the Alexandria Division, there were 238 Chapter 13 cases filed by lawyers during January through June 2025. Most of those cases, 162 out of that 238 were filed by just six lawyers. Those same top six lawyer also had 88 dismissals.
The two busiest lawyers filed 101 cases and had 66 dismissals. The next four lawyers filed 61 cases and had 22 dismissals. It looks like the busiest lawyers had more than half their cases dismissed; for the next busiest, about a third. (We filed seventeen Chapter 13 cases in the first half of 2025 and had four dismissals.)
(Are you looking for a lawyer to file Chapter 13 and hope to get a discharge? You may want a lawyer who does many, but not too many, Chapter 13 cases.)
The Bad News. Often, Chapter 13 dismissal is a disaster. People can end up losing their homes.
Chapter 13 dismissal sometimes means people lose their homes.
The Good News. Sometimes, people recover from a dismissed Chapter 13, by filing a new case and trying again. Sometimes the problem just goes away. Not all dismissed Chapter 13s are bad.
Examples of “Good Result” Chapter 13 Dismissals
Greg and Sally were falling behind on their mortgage and couldn’t pay their unsecured debts. We filed Chapter 13 to catch the house up. But, that case got dismissed, because they couldn’t afford the payments. Fortunately, Greg then got approved for an 80% VA disability, and they filed Chapter 13 again. With that VA income, they were comfortably to catch up the mortgage and pay their other debts. Sadly, two years later, Sally and then Greg both died a few months apart. Their remaining unpaid debts died with them, so the Chapter 13 was dismissed. (Afterward, their daughter sold the house.)
Marcus was in a divorce dispute with his ex wife about paying her half of the value of an overseas property in his name. He filed Chapter 13 to spread the payment over five years. After the bankruptcy was filed, they worked out a new agreement to just transfer that property to their daughter. That solved the problem and the Chapter 13 was then dismissed.
PS  In case you are wondering, I never use real names in my examples.
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