Handling a Bankruptcy Dismissal: How to File a Motion to Shorten the Prejudice Period

If your bankruptcy case was dismissed, you are barred by the 180-day rule from refiling.  During this time, the automatic stay is unavailable, leaving you fully exposed to creditors. However, steps can be taken to remove the dismissal and proceed with your case.

By Alexander Hernandez, J.D., Professor, and Author of Consumer Bankruptcy Law (Routledge).

Key Takeaways: Filing a Motion to Shorten the Prejudice Period

• Understanding the 180-Day Bar: When a case is dismissed, refiling is prohibited for six months, allowing creditors to move forward with collection efforts such as car repossessions and foreclosure.
• Filing a Motion: Shortening the prejudice period is a formal legal procedure that requires a scheduled hearing before a judge. You must be prepared to have your motion challenged by the Chapter 7 or 13 Trustee or affected creditors.
• Chapter 7 Bankruptcy: In Chapter 7, missing a 341 Meeting of Creditors requires evidence and testimony before the bankruptcy judge.
• Chapter 13 Bankruptcy: When seeking relief after a Chapter 13 dismissal, simply paying the “past due” amount is often insufficient. You must be prepared to bring the plan fully current and prove you have the funds to make the next scheduled payment.
• Motion to Lift the Stay: In cases involving ongoing foreclosure, judges may grant relief to refile but simultaneously issue a “lift stay” order. This allows the bankruptcy case to proceed while permitting the mortgage lender to continue its foreclosure proceedings.

Understanding the 180-Day Bar

The 180‑day refiling bar exists to prevent abuse of the bankruptcy system. Under 11 U.S.C. §109(g), the court may prohibit a debtor from refiling when prior cases were dismissed for willful failure to comply with court orders or for using bankruptcy solely to delay foreclosure or eviction.

However, 11 U.S.C. §349(a) allows a debtor to request relief from that bar. A debtor may file a Motion to Shorten the Prejudice Period and must show a substantial change in financial circumstances or that the prior dismissal resulted from factors beyond their control, rather than bad‑faith serial filing.

How to Proceed with Your Case After It’s Been Dismissed

A motion to shorten the prejudice period is a formal request to the bankruptcy court to lift the 180-day restriction. This is not granted automatically. A hearing has to be scheduled before the bankruptcy judge, and creditors and the Chapter 7 or 13 trustee have the right to object.

Setting Aside the Dismissal in a Chapter 7 Bankruptcy

The specific cause for dismissal often varies by chapter. In my practice, Chapter 7 dismissals frequently stem from a failure to attend the 341 Meeting of Creditors or a failure to provide mandatory documentation.

If you missed your hearing, you will typically need to provide documentation, including testifying as to why you were unable to attend.

I have often handled cases where a client’s vehicle broke down on the way to the hearing, but by providing the court with a copy of the towing receipt, we were able to demonstrate that the failure to appear was caused by an uncontrollable emergency rather than a lack of intent. It is important to remember that the court will also weigh the surrounding circumstances.

For instance, if you are facing an active foreclosure, the court may agree to shorten the prejudice period so that you can proceed with your bankruptcy case. However, the judge may also grant the mortgage lender relief from the automatic stay under 11 U.S.C. §362(d).

A stay‑relief order allows the lender to continue the foreclosure process, even while your bankruptcy case remains pending. Under §362(d), the bankruptcy judge has the authority to lift the stay “for cause,” including lack of adequate protection or the debtor’s inability to cure the default.

For example, if the debtor is behind on their car payments or mortgage, they would not be able to keep the asset by filing Chapter 7. That would require Chapter 13. So in that scenario, the judge is likely to lift the stay.

Shortening the Prejudice Period in Chapter 13

In a Chapter 13 case, dismissals can stem from the same administrative failures seen in Chapter 7, but the most common cause is a default on plan payments. When filing a motion to shorten the prejudice period, the court will require confirmation that you are fully prepared to get back on track. This means you must have the funds for the missed payments, but also the upcoming ones.

For example, if your plan payment is $1,000 per month and your case was dismissed after missing two months, you cannot simply pay the arrears by the time the hearing is held. By that point, the third payment is due, and the fourth is likely around the corner.

When you file a Motion to Shorten the Prejudice Period, the court will almost always require you to be fully current on your Chapter 13 plan payments before granting relief. Practically, this means the judge will expect you to have the full $3,000 needed to cure the delinquency, plus the $1,000 upcoming monthly payment.

This requirement exists because a dismissal does not pause or extend the plan’s statutory duration of a maximum of 60 months under 11 U.S.C. §1322(d), even if the case is dismissed and later reinstated or refiled.

The Professor’s Conclusion

A dismissal is a significant procedural hurdle, but it’s not the end of your bankruptcy case.  Whether you are dealing with a missed meeting in Chapter 7 or a payment default in Chapter 13, the court’s primary concern is determining whether you have the intent and the capacity to move forward.

You can successfully shorten the prejudice period, but it requires being able to explain why your case should move forward and that you are not acting in bad faith.

Educational Resources

• For Institutions: Colleges and universities can purchase or request examination copies of my textbook directly from Routledge Publishing.
• For Students & Practitioners: Single print and digital copies are available via Amazon Books.
• Video Lectures: Stream comprehensive legal breakdowns and video explanations on the Prof. Hernandez YouTube Channel.

Bankruptcy Court & Consumer Resources

Explore a deep dive for consumer guides and court directories to navigate your legal options:

• A step-by-step master guide on Filing for Bankruptcy and Navigating the Petition.
• Access full directories for the Federal Bankruptcy Court System and Trustee Contact Information.
• Protect your assets by reviewing your specific State Bankruptcy Exemptions or compare them against the Federal Bankruptcy Exemptions.
• Prepare for your court date with the updated brief on the 341 Meeting of Creditors Rules and Procedures.

Please note that the information on this site does not constitute legal advice and should be considered for informational purposes only.

The U.S. Bankruptcy Code

• 11 U.S. Code §109 – Who May be a Debtor.
• 11 U.S. Code §349 – Effect of Dismissal.
• 11 U.S. Code §362 – Automatic Stay.
• 11 U.S. Code §1322 – Contents of Plan.