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What if I miss a Chapter 13 repayment plan payment?

On Behalf of | Mar 11, 2016 | Chapter 13 | 0 comments

Before entering Chapter 13 bankruptcy proceedings, debtors should consider whether they have a stable enough income in order to meet the requirements of paying a specific amount of money in regular installments for three to five years. That is because, if the payments cannot be made in a timely fashion, then it could render the bankruptcy process invalid and the bankruptcy could ultimately be dismissed.

Under Chapter 13 rules, if a debtor fails to pay his or her scheduled payment, then the bankruptcy trustee can file for the dismissal of the bankruptcy. Ultimately, the debtor entered into an agreement with the bankruptcy court to meet the court-approved repayment plan’s requirements. If the requirements are not met and creditors are not receiving their payments, then it could render the proceedings invalid if the court chooses to approve of the dismissal.

Once the dismissal is approved by the bankruptcy court, then the debtor will again be subjected to creditor and collection agency harassment. Bankruptcy laws prevent collection attempts on debts covered by the bankruptcy, but once the process has been invalidated, those collection attempts can legally resume. They will also be permitted to seek payment of interest that accrued during the time period of the bankruptcy process.

Long story short, Kentucky residents do not want to get behind on their Chapter 13 bankruptcy payments, but sometimes financial circumstances are such that it renders payments impossible. For Kentucky residents in danger of not paying their Chapter 13 payments, it is important to discuss the matter with a qualified bankruptcy attorney for advice on how they should proceed.

Source: FindLaw, “Chapter 13 Bankruptcy Rules FAQ,” accessed March 11, 2016