Chapter 13 bankruptcy is otherwise known as wage earner’s bankruptcy because it contains a mandatory, scheduled repayment plan that most likely requires a regular income to keep up with. So if your appointed bankruptcy trustee realizes that you are struggling to make these monthly payments on time and in full, the state of your Chapter 13 bankruptcy case may be threatened. Well, with that being said, please read on to discover what happens if you miss a scheduled Chapter 13 bankruptcy payment and how a seasoned Louisville, Kentucky Chapter 13 bankruptcy lawyer at Schwartz Bankruptcy Law Center can help you avoid missing any.
What happens if I miss a scheduled Chapter 13 bankruptcy payment?
You may have to make weekly, bi-weekly, semi-monthly, or monthly payments to your assigned Chapter 13 bankruptcy trustee, who then forwards these funds to your outstanding creditors. This is to say that there is no hiding from them if you are late or short in your mandatory, scheduled payment.
If you are late or short, they may immediately report it to the Kentucky bankruptcy court handling your case. And if they believe that you are unequipped to proceed forward with your bankruptcy proceedings, they may go as far as filing a motion to dismiss your case. Ultimately, if the court grants this motion, they may seize their protection against your outstanding creditors. Meaning, your creditors may resume their collection efforts to receive the rest of what is owed to them, which may include foreclosing upon your home, repossessing your vehicles, etc.
What should I do to avoid missing a mandatory, scheduled payment?
You must stay on top of your finances so that you may know well in advance if you will be late or short in paying off your mandatory, scheduled Chapter 13 bankruptcy payment. If you expect this, you may give your bankruptcy trustee a heads-up on your situation. And if they are kind enough to believe this is a one-off incident, they may give you more time to make up for your missed payment.
However, say that you think that this may be a repeating issue. Well then, you may take the initiative to file a formal motion with the Kentucky bankruptcy court to modify your established repayment plan. With this, you must explain why such a modification is necessary, with supporting evidence, and propose a modified plan that is more manageable for you. For example, if you were originally scheduled to pay off all your debts within three years, you may ask to extend this timeline to five years. That way, you may be expected to pay less weekly, bi-weekly, semi-monthly, or monthly.
Lastly, if you find yourself in a more serious financial crisis, you may petition for a hardship discharge. Or, you may ask to convert your Chapter 13 bankruptcy case into Chapter 7.
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 competent Louisville, Kentucky consumer bankruptcy lawyer from Schwartz Bankruptcy Law Center today.
