Chapter 13 bankruptcy allows you to consolidate your debts, combining them into one affordable monthly payment. But because the repayment plan period is quite long –typically between three and five years – you could end up missing a payment at some point.
If an unexpected car repair, medical emergency or personal crisis impacts your finances and makes it impossible for you to pay a scheduled Chapter 13 bankruptcy plan payment, you may face serious consequences. Here’s what you need to know – and how to keep your financial hiccup from bringing your dreams of a fresh start to an end.
When you file for Chapter 13, the bankruptcy court won’t automatically confirm or approve your repayment plan. The review process can take several months, and if you don’t keep up with your payments during that time, the court may decide against confirming your debt reorganization plan.
An automatic stay goes into effect as soon as you file for bankruptcy, stopping your creditors from taking any collection action – including repossession and foreclosure. If you default on your Chapter 13 bankruptcy plan payments, your creditors may obtain court permission to resume their debt collection efforts.
If you fail to make your scheduled Chapter 13 plan payments, your bankruptcy trustee could ask the court to dismiss your case. And if the judge agrees that you have failed to comply with your repayment plan requirements, you won’t obtain the debt relief you need.
If you run into financial troubles and miss a Chapter 13 bankruptcy plan payments – or even a few payments – all may not be lost. Depending upon your situation, you may be able to save your bankruptcy by:
You may also have other options, such as requesting a hardship discharge or filing a second bankruptcy claim. So don’t despair if you miss any plan payments – instead, consult with an experienced bankruptcy lawyer.
For expert legal advice in the northern Utah area, turn to the professional team at the Law Office of Davis & Jones, P.C., in Salt Lake City. Contact us and schedule a free consultation to discuss your Chapter 13 bankruptcy case today.