When you file for Chapter 13 bankruptcy, you make a repayment plan and agree to stick with it. This stops your creditors from coming after you. You need to make each payment on time though, because if you miss a Chapter 13 bankruptcy payment you could end up opening yourself up to harassment from bet collectors. If you think that you are going to miss a payment, this advice from a Montgomery County Chapter 13 bankruptcy lawyer might help you.
What Should I Do If I Think I’m Going to Miss a Chapter 13 Bankruptcy Payment?
If you think that you are going to miss a Chapter 13 bankruptcy payment, you should take responsibility for it. If you just ignore your obligation and don’t make a payment, you run the risk of a bankruptcy trustee taking action against you. Instead, make it clear to them that you are going to have a difficult time making your payment this month.
When you reach out to your trustee and your attorney, you are showing that you are operating in good faith. You are not trying to skirt responsibility. You have encountered a problem but you are working to make good on your obligations.
Will My Repayment Plan Get Cancelled If I Miss a Chapter 13 Bankruptcy Payment?
When you don’t make your Chapter 13 bankruptcy payment on time, you could end up opening yourself up to some legal issues. If you miss that payment and do not say anything to your trustee, they can file a motion to dismiss for material default. This means that you defaulted on your plan and your Chapter 13 case will be dismissed.
What does that mean? Well, when you file for bankruptcy a stay is issued against your creditors. This means that they can no longer call you, send letters, or otherwise bug you about your debt. When you default, this stay is canceled. Your creditors can take action against you once again.
Missing just one Chapter 13 bankruptcy payment is unlikely to lead to this. This emphasizes the importance of being forthright if you think you’ll miss a payment though. Keep your trustee in the loop and do your best to stick to your payment plan.
Can I Modify My Repayment Plan?
What can you do if you think that you are going to struggle with more than one payment? If you think that you are going to continue to have financial problems, you should address this with your trustee and attorney right away.
There may be options available to you. You can modify your plan to reduce your payments in some cases. The key is to act as soon as you think that you will struggle to meet your obligations.
Talk to a Bankruptcy Attorney
If you are thinking about filing for bankruptcy or struggling with your current plan, we may be able to help. Contact Mudrick & Zucker to schedule a consultation with our team.
