What Can Happen If I Miss A Chapter 13 Payment?

When someone is facing times of financial stress and difficulty, he or she may find bankruptcy to be the best option for achieving debt relief. Financial instability can put an inordinate amount of stress on every area of your life stress you shouldnt have to live with. One option for getting out of debt is filing for Chapter 13 bankruptcy where the debtor establishes a repayment plan set up by the bankruptcy trustee.

Unlike Chapter 7 bankruptcy where your dischargeable debts are wiped clean automatically, Chapter 13 bankruptcy lets you can pay off your creditors over a three to five year period. This allows you to make payments without too much financial burden and also is more forgiving on your credit score than Chapter 7. Unfortunately, there could be some potentially serious consequences if you miss a payment.

Missed Payment Consequences

The Chapter 13 repayment plan is a great way for debtors to get out of debt over time without completely destroying their credit score and also getting to keep assets. Creditors trust you will make all necessary payments to pay off your debts. However, if you miss a payment, you could face the following consequences:

  • * Forfeited chance of achieving debt forgiveness or having certain debts discharged
  • * Your bankruptcy case could be dismissed
  • * Forced to transfer to a Chapter 7 bankruptcy case

When your case is dismissed, you will have to wait an amount of time before you can file for bankruptcy again. If you have missed a payment, you shouldn’t panic. In some cases, you may be able to speak with the bankruptcy trustee and argue for a lesser punishment.

1 Comment

  1. Thank you for the information. I did not know the penalties for missing a chapter 13 payment.

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