Procedures for voluntary dismissal, dismissal for cause, conversion between chapters, and suspension of a bankruptcy case.
Except as provided in Sections 707(a)(3), 707(b), 1208(b), and 1307(b) of the Code, and in Rule 1017(b), (c), and (e), a case shall not be dismissed on motion of the petitioner, for want of prosecution or other cause, or by consent of the parties, before a hearing on notice as provided in Rule 2002. Fed. R. Bankr. P. 1017(a).
Federal Rule of Bankruptcy Procedure 1017 establishes the procedural framework for ending or pausing a bankruptcy case before the entry of a discharge or other final adjudication. The rule encompasses four substantively distinct case-disposition pathways:
The debtor's right to dismiss varies by chapter:
The asymmetry reflects the substantive design of each chapter: Chapter 7 is involuntary in significant respects once filed (the trustee has the right to administer assets), while Chapter 13 is designed to permit the debtor to retain control and to exit if circumstances change.
A creditor, the trustee, or the United States Trustee may move to dismiss a case for cause under the chapter-specific authority:
Rule 1017(f) provides that motions to dismiss for cause shall be governed by Rule 9014 (contested matters), with notice and a hearing required before dismissal.
Rule 1017(e) implements the special procedure for dismissal of a Chapter 7 case as an abuse under Section 707(b). A motion to dismiss under Section 707(b) must be filed within 60 days after the first date set for the meeting of creditors. The 60-day deadline is firm; only the court may extend it on motion filed before expiration.
The Section 707(b) means-test procedure includes three pathways for finding abuse:
The United States Trustee is required to file a statement within 10 days after the first date set for the meeting of creditors indicating whether the presumption of abuse arises. A creditor may also file a motion under Section 707(b)(1) within the 60-day deadline.
Rule 1017(d) provides that conversion of a case to another chapter is also governed by Rule 9014 (contested matter procedure), except in the case of an unconditional right of conversion (e.g., Section 1112(a) Chapter 11 voluntary conversion to Chapter 7 by the debtor). Conversion changes the operative chapter without commencing a new case; post-conversion procedures are then governed by Rule 1019.
Section 305 of the Code authorizes the court to dismiss or suspend a bankruptcy case if the interests of creditors and the debtor would be better served by such dismissal or suspension, or in specific circumstances involving foreign main proceedings under Section 1515. Section 305 abstention is narrow and uncommon; reviewing courts treat it as an extraordinary remedy. The procedural framework is set out in Rule 1017(a), with notice and a hearing required.
A Chapter 13 debtor whose case has not previously been converted decides to dismiss the case to pursue an out-of-court workout. The debtor files a notice of dismissal under Section 1307(b). The Chapter 13 trustee acknowledges the filing, and the court enters an order dismissing the case. The dismissal is essentially as of right; no creditor objection or court evaluation is required.
The United States Trustee files a statement within 10 days after the Section 341 meeting indicating that the presumption of abuse arises based on the debtor's means-test calculation. The United States Trustee then files a motion under Section 707(b)(2) within the 60-day deadline. The court holds a hearing on the means-test calculation and any rebuttal evidence and rules on the motion.
Rule 1017 is the procedural rulebook for case exit short of completion. Every bankruptcy case ultimately concludes through one of three pathways: discharge or plan confirmation (the successful endings), dismissal under Rule 1017, or conversion under Rule 1017 followed by Rule 1019 to a different chapter that then has its own ending. The rule's structure - with chapter-specific cross-references and the special Section 707(b) deadline - reflects the substantive distinctions among the chapters.
The interaction between Rule 1017 and the United States Trustee's role is particularly important in consumer cases. The United States Trustee's mandatory Section 707(b) statement and the 60-day Section 707(b) motion deadline shape the practical pace of every consumer Chapter 7 case.
Dismissal is not always a return to the status quo ante. Dismissal of a bankruptcy case terminates the automatic stay and most procedural protections, but a debtor who refiles within 180 days after dismissal under certain circumstances may be subject to the limitations of Section 109(g) and the modified automatic-stay provisions of Section 362(c)(3) and (4). Dismissal has substantive consequences beyond mere termination.
This page provides general information about Federal Rule of Bankruptcy Procedure 1017. It does not constitute legal advice. Dismissal, conversion, and suspension decisions in any specific case have substantial substantive consequences and should be evaluated by qualified counsel.