Key Points

  • A Chapter 13 debtor's right to voluntary dismissal under 11 U.S.C. § 1307(b) is absolute, even when the debtor acted in bad faith, and a bankruptcy court must take up a dismissal request before other pending matters.
  • The bankruptcy court erred by dismissing the Srinivasans' cases for failure to comply with an order instead of on their § 1307(b) requests; the Ninth Circuit reversed and directed entry of new § 1307(b) dismissal orders.
  • Section 109(g)'s 180-day bar is a discrete sanction, not a ceiling; § 349(a) lets a bankruptcy court impose a longer refiling bar for cause, including alongside a § 1307(b) voluntary dismissal.
  • The Supreme Court's decision in Law does not forbid such bars because the Code grants discretion rather than prohibiting them, the panel held, agreeing with the Third Circuit's decision in In re Ross.
  • The one-year bar was a reasonable exercise of discretion given the family's repeated filings and failures to prosecute, and the appeal was not moot even though the bar expired June 27, 2026.

Bankruptcy judges may bar repeat filers from returning to bankruptcy court for longer than 180 days, a federal appeals court held on Nov. 4, rejecting a mother and son's argument that the Bankruptcy Code caps such bans at that length.

The U.S. Court of Appeals for the Ninth Circuit gave the debtors, Beena and Vikram Srinivasan, a partial win. It held that the bankruptcy court erred when it threw out their Chapter 13 cases for failing to follow a court order instead of granting their own requests to dismiss. But the three-judge panel, in an opinion by Judge Ana de Alba, affirmed the one-year refiling bars imposed after Milestone Financial LLC, the lender that had foreclosed on the family's home and was trying to evict them, sought two-year bars.

The published decision answers a question the Ninth Circuit had never squarely decided. The panel sided with the Second and Fourth Circuits, which read the Code to allow refiling bars longer than 180 days when a court finds cause. It also followed the Third Circuit in holding that a court may impose such a bar alongside a debtor's voluntary dismissal, and that the Supreme Court's 2014 decision in Law v. Siegel did not take that power away.

The dispute began when Milestone financed a second mortgage in December 2018 on a property Beena Srinivasan and her husband owned, according to the opinion. Vikram Srinivasan signed the loan documents as his parents' purported attorney-in-fact, and the family never made a payment. Milestone was the foreclosing beneficiary at the trustee's foreclosure sale. After an Alameda County eviction moratorium delayed its efforts, it filed an unlawful detainer action.

As that case approached trial, mother and son each filed for Chapter 13 bankruptcy on April 11, 2025. The filings triggered the automatic stay. Between them, they had filed seven earlier petitions since 2019. All four of Beena's prior cases were dismissed for failure to file required documents, and Vikram's third case ended with a one-year bar.

Representing themselves, the Srinivasans filed the new petitions without schedules and other required papers. The bankruptcy court extended their deadline to May 14, 2025. On that day, instead of filing the documents, they asked to dismiss their cases voluntarily under Section 1307(b) of the Code. Two days later the court dismissed the cases for failure to comply with its order. After Milestone moved for two-year bars, the court imposed one-year bars.

On the first issue, the panel ruled for the debtors. "We hold that Appellants had an absolute right to dismiss their Chapter 13 cases under 11 U.S.C. § 1307(b), and the bankruptcy court erred by not honoring that right," Judge de Alba wrote. Milestone had argued that the debtors remained bound by the court's document order until dismissal was entered. The panel called that "incorrect" and held, citing its own precedent, that a bankruptcy court "must consider a § 1307(b) dismissal request before other pending matters."

The panel also faulted the bankruptcy court for relying on the debtors' bad faith to justify its choice. That reasoning, de Alba wrote, "ostensibly deploys the 'implied [bad-faith] exception to § 1307(b)' we rejected in Nichols," a 2021 Ninth Circuit decision. The court's decision to put its own order ahead of the dismissal requests "amounted to an exercise of discretion where none is provided," de Alba wrote.

The debtors fared worse on the refiling bar. They argued that Section 109(g), which bars certain debtors from refiling for 180 days, sets the outer limit, and that Section 349(a), which governs the effect of a dismissal, points back to it. "Appellants misinterpret § 109(g) as a ceiling on the amount of time for which bankruptcy courts may impose a refiling bar," de Alba wrote. Instead, the panel held, the provision "provides a discrete sanction applicable in certain, statutorily prescribed, circumstances."

The panel acknowledged that "the text of § 349(a) is not the picture of clarity." It rejected the debtors' reliance on Law, in which the Supreme Court held that a bankruptcy court's equitable power cannot override explicit provisions of the Code. "Law does not prohibit bankruptcy courts from acting where the Code grants discretion or is silent," de Alba wrote. The panel quoted a sister circuit's observation that the Code's provisions complement one another "in arming the bankruptcy courts with a variety of weapons for use in controlling serial filers, a species not likely to become endangered in the foreseeable future."

The panel also held that the one-year length was within the bankruptcy court's discretion. It pointed to a record showing that the Srinivasans skipped hearings, including the one on the refiling-bar motion, and that the April 2025 petitions were the 12th and 13th bankruptcy cases filed by members of the Srinivasan family. The debtors "have been living rent/mortgage free in their home for multiple years during the pendency of these proceedings," the opinion said. The panel rejected their argument that the bar had to be backdated to the day they sought dismissal.

Milestone had raised mootness because the bars expired on June 27, 2026. The panel held that the dispute fit an exception to the mootness doctrine for issues that recur but end too quickly to be reviewed, because the bars were time-limited and the debtors were reasonably likely to face one again.

Joseph Boufadel of Salvato Boufadel LLP argued for the Srinivasans. Sarah L. Little of Kornfield Nyberg Bendes Kuhner & Little PC argued for Milestone. Judges Kenneth K. Lee and Salvador Mendoza, Jr. also sat on the panel.

The case returns to the bankruptcy court, which must enter new orders dismissing the cases on the debtors' Section 1307(b) requests. The refiling bars stand. The panel found that the error in the grounds for dismissal did not affect the bar, because the court could have "just as easily attached its filing injunction to [Appellants'] requested dismissal order."