Ninth Circuit Bolsters ‘Absolute Right’ to Dismiss Bankruptcy

A bankruptcy court doesn’t need to determine if a Chapter 13 bankruptcy was filed in bad faith in order to approve a debtor’s voluntary motion for dismissal, the US Court of Appeals for the Ninth Circuit held.

Under the Ninth Circuit’s 2021 holding in In re Nichols, a debtor has an “absolute right” to dismiss a Chapter 13 case. That doesn’t change even if a creditor alleges a bankruptcy was filed in bad faith, the appellate court ruled Tuesday.

“We conclude that the bankruptcy court is not required to conclusively determine a debtor’s eligibility for Chapter 13 relief before ...