How to Cancel a Chapter 7 Bankruptcy

After you've made the decision to file for Chapter 7 bankruptcy, canceling it can be a bit of a challenge. However, you do have the right to ask the courts to at least consider your request for cancellation. At its own discretion, the court can then decide to approve or deny your request. It’s important to remember that canceling a bankruptcy can have a negative effect on your ability to file in the future.

1. Determine your reasoning for canceling your Chapter 7 bankruptcy. The final decision remains with the judge as to whether or not a cancellation will be granted. Your reasoning should be well thought out; common reasons include the inability to reach an agreement with a creditor or a financial situation that completely changes your need to file bankruptcy. Be sure to present your argument in a clear and concise manner.


2. Obtain and complete Form 20A. This a generic form that is used in all bankruptcy court motions. Once you have completed the form, make copies and submit it to both the courts and all creditors involved in your case.


3. Submit notification to all parties involved in the case concerning your decision to cancel the proceedings. In the event the judge approves your request to cancel the bankruptcy, all parties involved will be directly affected by the decision. This is why it is essential to provide each party with proper notice. This notice will need to be "served" by a professional company, so ask your lawyer for any recommendations. The notice must be received by all creditors prior to the hearing to allow them a fair amount of time to respond to your motion.


4. Give the completed Form 20A to the clerk at the courthouse where your bankruptcy is being processed. Remember, you will have to pay a fee to file this motion and the price may vary from state to state depending on their regulations concerning fees.


5. Wait to hear from the courthouse regarding the cancellation. Depending on the policy of the courthouse, you may be notified by mail of the scheduled date of your hearing. However, there are some situations where you will need to call the courthouse periodically in order to confirm whether or not a date has been set.