When you choose to use Chapter 13 bankruptcy, your lawyer will work with the trustee to create a repayment plan for you. This plan typically lasts for either 36 months or 60 months, and in order to successfully complete your Chapter 13 plan, you must make every single payment for the entire duration of the plan. Failing to make even just one of the required payments could result in consequences, and here are some of the consequences you face if you do not follow the plan you have for your bankruptcy case.
Your automatic stay will end
If you do not make your payments, the court could pursue closing your case, and if this happens, the automatic stay will end. When this court-ordered event ends, it gives permission to your creditors to start collection efforts once again for the debts you owe. You may suddenly start getting a lot of phone calls and letters in the mail from your creditors if the automatic stay ends due to you failing to follow the repayment plan.
The court will not confirm your plan
Another consequence of not following the plan is that you will have trouble getting the court to confirm it. When you start your plan, it will take time for the court to evaluate the plan and approve it. When they approve it, they are confirming it and stating that they agree with it. If you do not make your payments, they will not confirm it, which means you will not be able to use Chapter 13 at this time.
The court may dismiss your case
While the court may not dismiss your case if you miss just one payment, they will likely dismiss your case if you miss several payments. Missing any of your payments puts you at risk for this happening, and if the court dismisses your case, you would have to start your case all over again if you want to use Chapter 13 for relief of debt.
You will not receive a discharge
Finally, you cannot receive a discharge of your plan if you fail to make your payments. Instead, the court will deny the discharge, and this will leave you owing all the debts you currently have.
You take a risk each time you decide to skip a payment in a Chapter 13 case. If you have questions about this or need more information, reach out to bankruptcy attorney services in your area.
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