As the debtor of a Chapter 13 bankruptcy case, you must not take lightly your opportunity to earn financial relief, all while under the protection of the New York State Bankruptcy Court. This means you must do everything possible to make your court-ordered, scheduled payments on time and in full. By even just being a day late or a dollar short, so to speak, you may face threateningly serious consequences. Well, with all that being said, please continue reading to learn what might happen if you miss a payment in your Chapter 13 bankruptcy plan and how an experienced Rockland County Chapter 13 bankruptcy attorney at The Law Offices of Allen A. Kolber, Esq. can help you avoid this complicated aftermath.
What should I know about the Chapter 13 repayment plan?
For starters, you should know that a Chapter 13 bankruptcy is also commonly referred to as a wage earner’s plan. This is because eligible debtors most likely need to earn a regular income to keep up with the mandatory repayment plan.
In short, the Chapter 13 repayment plan may be a way for you to pay off your debts over a set period. Usually, this period spans anywhere between three to five years. With this, you may pay off a lesser amount in debts every month for a longer period than you were previously allotted, making these payments all the more manageable given your current financial state.
What happens if I miss a payment in my Chapter 13 bankruptcy plan?
Toward the beginning of your Chapter 13 bankruptcy proceedings, you may draft and propose a tentative repayment plan to the judge handling your case. The judge may ultimately approve of it, making it a court order. Therefore, it may be very bad for you to violate this court order by missing even just one scheduled payment.
Essentially, the Chapter 13 bankruptcy trustee assigned to your case may report this missed payment to the court. What’s worse, they may also file a motion to dismiss your case entirely if they believe you cannot handle it or take it seriously. If the court ends up granting this motion to dismiss your case, you may lose the court’s protection. This means your outstanding creditors may resume their aggressive collection activities against you.
In a worst-case scenario, say that the payments you were at fault for falling behind on were for your mortgage or car loan. Well, most unfortunately, if your Chapter 13 bankruptcy case is dismissed, your mortgage lender may ask to foreclose on your house, and your car loan lender may take action to repossess your vehicle.
There is no sense waiting to seek legal assistance if you anticipate missing your next Chapter 13 bankruptcy payment. So please reach out to a skilled Rockland County bankruptcy attorney at The Law Offices of Allen A. Kolber, Esq. today.
