When you file for Chapter 13 bankruptcy, you make a payment plan and agree to stick to it. This is how you pay off your creditors and end up with a clean financial slate. If you miss a bankruptcy payment, you could end up running into some trouble. If you think that you might have some trouble meeting your obligations under your current payment plan, you might want to talk to a Rockland County Chapter 13 bankruptcy lawyer.

What Should I Do If I Miss a Bankruptcy Payment?

When you miss a bankruptcy payment, you could end up complicating your Chapter 13 case and payment plan. If you are going to be late with your payment, you should contact your attorney and the bankruptcy trustee. Sometimes things that are out of our control can end up affecting our finances. Whether you had an unexpected expense or you are waiting on payment from a freelance gig that hasn’t come through just yet, making arrangements with your trustee and notifying them about a potentially late bankruptcy payment is the way to go.

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

You are unlikely to suffer serious consequences for one late bankruptcy payment, especially if you reach out and make arrangements with your bankruptcy trustee. However, if you continue to miss payments your trustee may be able to file a motion to dismiss for material default. Essentially, this means that you have defaulted on your payment plan and that your Chapter 13 case will be dismissed as a result.

This is not ideal. This would not only undo any progress you have made, but it also usually a means to the automatic stay that comes with bankruptcy proceedings. That means that your creditors will be able to pursue you again. You could end up facing liens, wage garnishments, and other major inconveniences that could have been avoided if you had continued to make Chapter 13 bankruptcy payments.

Can I Change My Plan Due to Hardship?

Missing a bankruptcy payment or two and then making plans to catch up is usually acceptable to a bankruptcy trustee. However, if your financial situation has changed and you are going to continue to struggle and make payments, that can risk getting your case dismissed.

In situations like these, it’s wise to reach out to your trustee and ask to make another arrangement. You can petition the court for a modification to your payment plan. This can extend your repayment timeline, but it can make the payments more manageable so that you do not default. In extreme situations where you are unable to make any payments, you may be able to ask for a discharge due to hardship.

Contact a Bankruptcy Lawyer

If you are considering filing for bankruptcy or you want to make a change to your current bankruptcy plan, you are going to want the assistance of an attorney. Contact the Lauterbach Law Firm and schedule a consultation with our team. We would be happy to tell you more about how we can be of assistance.