That is when we substituted into the case and took over representing the Debtors and, by converting their case to one under Chapter 13, our clients were able to save both properties. The trustee objected to both of the exemptions and sought turnover of both properties.
Their original attorney (not us) claimed the $175,000 California homestead exemption on their personal residence and the rental property despite the fact that you must reside in the property in which you claim a homestead exemption and married couples are only entitled to one homestead exemption that cannot be split. This attorney’s clients lived in a home with no equity, but they also had a rental home with a substantial amount of equity. We took on a case that was filed by an inexperienced attorney who shall remain nameless. So if filing a bankruptcy is voluntary, then why would the debtor not be able to change their mind and just as easily dismiss the case? Additionally, involuntary bankruptcy cases can back-fire on the creditors since the requirements are very strict and failure to meet these requirements can result in severe penalties against the creditors. However, these involuntary bankruptcies are extremely rare, and only account for 0.05% of all bankruptcy cases, and between 50% to 75% of these cases are dismissed. It is possible for the creditors to force someone into a Chapter 7 or 11 bankruptcy involuntarily. Nearly all bankruptcy cases are commenced by the debtor filing a bankruptcy petition with the court. Why Would it Be Difficult to Dismiss a Bankruptcy?
The problem is that if you actually want to dismiss your case, you might fall into the category of cases which are not easily dismissed. In some cases, dismissing a bankruptcy case is relatively simple. Whether or not you can easily dismiss your case depends on which chapter of bankruptcy you have filed and the specific facts of your financial situation.