If you file for Chapter 13 bankruptcy, you absolutely have to stick to your repayment plan. This means that making a late payment is rarely a good idea. You need to know the consequences of paying late and how it can affect your case. A Montgomery County Chapter 13 bankruptcy lawyer can tell you more.
What Happens If I Make a Late Payment?
Making a late payment could get your bankruptcy case dismissed outright. This is different than a discharge. A discharge means you met the obligations of a bankruptcy and your creditors are satisfied, even if they did not get the full amount owed. A dismissal means that all of your debts are back and that you must make payments to your creditors individually again.
A late payment could also cause the court to convert your bankruptcy into a Chapter 7 bankruptcy. That means that you’ll have to sell off assets to satisfy your creditors.
Will My Case Really Be Dismissed Over One Late Payment?
Yes, it is possible to have your bankruptcy dismissed after just one late payment. This is because Chapter 13 repayment plans do not offer a grace period. You have to make these payments on time and there really is not a lot of patience for any kind of delay.
What Can I Do If I Have to Make a Late Payment?
If you know that you are going to be late, you absolutely must contact your bankruptcy trustee. The sooner you reach out, the sooner you can reach some kind of arrangement. Life happens, and sometimes your finances can take an unexpected hit. This is usually understandable.
You also need to contact your lawyer. They can help you address the late payment and the source of the problem. If this is a one-time thing, that should be fine. If you’re going to continue to struggle to make payments, it may be time to ask for an amended plan or a hardship discharge.
Can I Change My Chapter 13 Plan?
In some cases, yes. You do need to have a good reason though. You can ask the court to reduce your monthly payments and have documented proof that supports your claim. If you can give a judge, the bankruptcy trustee, and your creditors enough evidence that you have experienced a life-altering event, like the loss of a job or hospitalization for a serious injury or illness, then you may be able to get an amended plan approved.
Contact Our Bankruptcy Lawyers
If you are considering filing for bankruptcy, don’t try and do it on your own. This process requires a lot of paperwork and simple mistakes can cause big legal and financial headaches. Instead, contact Mudrick & Zucker to schedule a consultation with our team. We’ll answer any questions you have about Chapter 13 bankruptcy and help you figure out if it’s the right option for you.
