What happens if I can't make payments in a chapter 13 bankruptcy? 24 Answers as of June 02, 2013I want to file a chapter 13 bankruptcy, because I want to be able to come up with a repayment schedule. My concern is that I may not be able to meet that schedule. What happens if I can't? Will my bankruptcy file get dismissed?
Ashman Law Office | Glen Edward Ashman
If you miss Chapter 13 payments your case will be dismissed. If you know payments will be a problem, Chapter 13 is not an option. It sounds like you are near making the horrible mistake of filing pro se (always a mistake). You will learn an expensive lesson - saving a few dollars on lawyer's fees is a very costly disaster if you file pro se. A lawyer will, in counseling you, determine if Chapter 13 is doable and will help you do a proper workable budget.
Answer Applies to: Georgia
Indianapolis Bankruptcy Law Office of Eric C. Lewis | Eric Lewis
It is an absolute necessity to make all payments as scheduled in Chapter 13. If you do not, the case will be dismissed by the court and the stay against collection efforts will expire.
Answer Applies to: Indiana
Anthony Saunders Esq., PLLC | Anthony M. Saunders
A person who can not make their payments under a chapter 13 plan has a few options. Obviously, the best scenario it to make all your payments for three or five years and have your case discharged. But a person may miss payments due to several scenarios including the loss of employment. This can cause the automatic stay to be lifted and allow for creditors to start or continue legal proceedings against the debtor including wage garnishment and foreclosures. One step is to request a modification of your payment plan. Another option is to try for a hardship discharge. A person who is unable to pay their payments based on loss of job (beyond your control) or medical conditions, could ask for a hardship discharge - however, there are qualifications for this and you should consult an attorney before proceeding. Other options include requesting a dismissal of your case that would allow for creditors to act as though no bankruptcy was filed, or you could convert your case into another chapter, most notably a chapter 7. In either event, you should contact an attorney about your case. There are lots of items that may or may not help you and the more information you can gather the better. A qualified bankruptcy attorney should be able to assist you.
Answer Applies to: Utah
The Barger Law Firm | Jason W. Barger
Yes, the trustee will file a motion to dismiss the case. Any money paid to the trustee, if not already distributed, will be returned to you. However, you will still be liable for the debt you had, minus any payments made by the trustee, prior to filing. If you don't think that you can make the payments, it is better to look at a Chapter 7. If you don't qualify for a Chapter 7 and can't make payments in a Chapter 13, you may very well be unable to take advantage of bankruptcy protection.
Answer Applies to: Texas
Debt Relief Law Center | Roger J. Bus
The Chapter 13 Trustees closely monitor a Chapter 13 Plan before confirmation. Once a Plan is confirmed, there is some slight flexibility- you can sometimes be late on payments and the Trustee will take no action- as long as your case remains feasible and will complete within 60 months. Eventually however, if you fall too fall behind, you will receive a Motion to Dismiss for failure to make payments and the Plan will be set for hearing for dismissal.
Answer Applies to: Michigan
The Schreiber Law Firm | Jeffrey D. Schreiber
First you will have to establish before your plan is approved that your income and expenses are such that you can make the payments. If not, you will not get the plan approved. And more than 80% of Chapter 13 cases filed without an attorney do not get approved due to the things you need to know to get an approvable plan before the court. If you do get a plan approved and later cannot make the payments, you would be subject to having the case dismissed for failure to make the plan payments.
Answer Applies to: California