What Happens If I Miss a Chapter 13 Bankruptcy Payment?

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Going through the Chapter 13 bankruptcy process can give you a chance to get a fresh financial start, but you need to abide by the rules of whatever deals you make. That means that you need to make each bankruptcy payment on time. If you don’t, you risk undoing this entire process and could find yourself in trouble with creditors once again. A Bergen County Chapter 13 bankruptcy lawyer can tell you how missed payments can become a major issue.

Can My Case Be Affected If I Miss a Bankruptcy Payment?

Yes, your case can be affected if you miss a bankruptcy payment. When you get behind on payments, the bankruptcy trustee may file a motion to dismiss for material default. You can default on a bankruptcy plan just by missing a payment or two.

This can be a problem. First of all, you lose any progress you made towards clearing your debt. The stay that was issued at the beginning of the process can also expire. This kept creditors from going after you for what you owe.

This could result in having liens put against your property or having your wages garnished. This is why it is a good idea to make a plan if you know that a bankruptcy payment is going to be late.

What Should I Do If I Know a Bankruptcy Payment Will Be Late?

Unexpected events can affect our finances. A bankruptcy trustee and the court should understand that. If you believe that you are going to fall behind on your Chapter 13 repayment plan, you need to reach out to your bankruptcy trustee right away. Talking to your attorney may also be a good idea.

Getting ahead of this is almost always a smart move. If your trustee just doesn’t receive a payment and then does not hear from you, they could just assume that you are blowing off this payment and your plan as a whole. This can encourage them to file a motion to dismiss, and then you’re going to have to face all kinds of financial headaches.

So if your next bankruptcy payment will be late, be honest. Tell your trustee and ask for some time to catch up. If this is not a common occurrence and you usually make your payments on time, there should be some wiggle room here.

Are There Any Options For Me If I’m Struggling Financially?

If you think that this is going to be more than a one-time thing, then you need to address your situation as soon as possible. You should talk to a lawyer and your trustee about adjusting your plan. If there has been a major change to your financial situation, you may be able to modify your bankruptcy payment plan.

Talk to a Lawyer Today

If you are ready to file for bankruptcy yourself, contact the Law Office of Boyd & Squitieri. You can schedule a consultation and learn more about the Chapter 13 bankruptcy process from our experienced legal team. We can help you decide whether or not this is the right option for you.