When you file for Chapter 13 bankruptcy, you are committing to a plan to pay off your debts. One thing that your plan is not accounting for is late payments. You have to make each Chapter 13 payment on time. If you think that you are going to struggle to do that, you need to consult with your Bergen County Chapter 13 bankruptcy lawyer.
How Can a Late Chapter 13 Payment Affect My Plan?
You do not get a lot of leeway when it comes to your Chapter 13 payment. Each one needs to be made on time. If you are late, you are risking your case getting dismissed. This is not a discharge of your debt. A dismissal means that your creditors can begin coming after you again because you did not stick to the terms of your Chapter 13 payment plan.
In some cases, a court can even change the type of bankruptcy due to late payments. You could end up being forced to convert to a Chapter 7 bankruptcy, which means that many of your assets will have to be sold off so that the money can go to your creditors.
What Should I Do If I Know a Chapter 13 Payment Will Be Late?
None of the above options sound ideal, but sometimes unexpected events can affect our finances. Is there any way to make a late Chapter 13 payment palatable to the court?
If you think that you are going to be late, you must reach out to your bankruptcy trustee and your attorney. If you are honest about your financial situation, you may be able to come to an arrangement. Doing nothing and just ignoring your obligation is going to get you in trouble. You need to address the possibility of a late Chapter 13 payment as soon as possible.
Do I Have Options If My Financial Situation Changes?
It’s also important to be forthright if you think that you’re going to continue to struggle to make each Chapter 13 payment. It may be necessary to ask for a change to your bankruptcy repayment plan, but you must have a good reason for asking for any kind of adjustment.
Not being able to manage your money is not a good excuse. Losing your job or suffering from a serious injury or illness could be. If you can show the court and trustee compelling evidence and documentation, it may be possible to modify your plan, extend it, or even ask for a hardship discharge.
The key is communicating though. Whether you are going to be late with one payment or you are having serious financial issues, you need to talk to your lawyer and trustee.
Talk to a Chapter 13 Bankruptcy Lawyer
If you want to learn more about the Chapter 13 bankruptcy process, contact the Law Office of Boyd & Squitieri. We can schedule a consultation for you and tell you more about how bankruptcy works and whether this is the right financial move for you.