When you go through Chapter 13 bankruptcy, you have to negotiate a payment plan with your creditors. These plans usually last three to five years, and it’s important to make sure that you pay on time each month. If you miss a payment to the bankruptcy trustee, that can cause some issues. If you are having financial problems, you need to address the matter right away. A Bergen County Chapter 13 bankruptcy lawyer can tell you what you should do.
Am I Allowed to Miss a Payment in Chapter 13 Bankruptcy?
When you file for Chapter 13 bankruptcy, you’re expected to make your payments on time. There isn’t a grace period. There isn’t a “soft” deadline. The bankruptcy trustee needs to be paid, and they need to be paid on time. If you do not make good on your obligations, your case could get dismissed and your creditors could decide to pursue you again.
What Can I Do If I Think I’ll Miss a Payment?
If you think that you are going to miss a payment, you need to get ahead of it. Talk to your bankruptcy trustee and your lawyer right away. Tell them what’s going on and your trustee may be able to work with you. It’s rare that one missed payment will result in your bankruptcy case being dismissed, but communication is key.
Can My Debts Still Be Discharged If I Miss a Payment?
One missed payment might not get your case dismissed, but a few of them could result in your case getting dismissed. It’s also possible that your Chapter 13 bankruptcy will be turned into a Chapter 7 bankruptcy. This would allow you to discharge debts, but you would have to sell off your assets to do that. Most people who file for Chapter 13 bankruptcy would like to avoid this, so we recommend making your payments on time.
Can I Ask the Court to Change My Payment Amount?
In some cases, yes. If you miss a payment and you’re confident that it’s just going to be a problem this one time, then you probably won’t need to modify your payment plan. However, if recent financial issues or other hardships have made it likely that you will continue to miss payments or make late payments in the future, you may want to ask the court to intervene.
You’ll need to have a good reason for the request, but it is possible for the court to reduce how much you have to pay each month. Your repayment period will just be extended. In the case of extreme hardship, your case could be discharged and your remaining debt could be wiped out. This is a rarity though.
Meet With Our Legal Team
If you have questions about Chapter 13 bankruptcy and how the process works, contact the Law Office of Boyd & Squitieri. We can schedule a consultation and tell you more about why you should have a lawyer help you file.
