Missing a payment in a Chapter 13 bankruptcy case can have serious repercussions, potentially jeopardizing your financial stability and the success of your repayment plan. While life’s uncertainties can lead to missed payments, it’s crucial to understand the gravity of the situation and take proactive steps to mitigate the damage. Please continue reading as we explore what happens if you miss a Chapter 13 payment and why connecting with our determined Wyoming Chapter 13 Bankruptcy Lawyers is in your best interest.
What is Chapter 13 Bankruptcy?
Chapter 13 bankruptcy, often referred to as “reorganization bankruptcy” or a “wage earner’s plan,” is a legal process in which individuals with regular income can restructure their debts and repay them over a specified period under a court-approved plan. This plan enables debtors to retain their property while managing their debt obligations through affordable monthly payments. It typically lasts three to five years, and once completed, your remaining qualifying debts will be discharged. Chapter 13 provides the breathing room needed to regain control of your finances by halting collection orders.
What Happens If I Miss a Payment?
Missing a Chapter 13 payment can have serious consequences for your bankruptcy case, potentially impacting the outcome. Don’t dismiss a missed payment as a minor oversight, as the court takes these matters seriously, making it imperative to understand the potential ramifications.
Generally, your trustee will issue a notice of delinquency, which will detail the missed payments and their potential consequences. If you fail to make up the missed payment or address the delinquency, your case could be dismissed. This means you would have to start the entire process over. This would leave you unprotected from creditor actions.
In some cases, the court could decide to modify your repayment plan, adjusting your monthly payments or the duration of your plan. The court may even cover your Chapter 13 case to a Chapter 7 liquidation bankruptcy. This can result in the loss of assets that you would have been able to retain under Chapter 13.
Given the potential consequences of missing a Chapter 13 payment, it’s in your best interest to contact a seasoned Gillette bankruptcy lawyer who can advise you on the best course of action. Keep in mind that the sooner you make up the missed payment, the less likely it is that your case will be jeopardized. We can assist you in requesting a modification to your repayment plan if your financial circumstances have changed.
By working closely with the dedicated lawyer from 307 Bankruptcy, you can navigate these challenges and complete your repayment plan. Connect with our firm today to learn how we can help you take proactive steps to manage your debts.
