What happens if you default on a Chapter 13 for failure to make monthly payments?

Asked on April 12, 2014 under Bankruptcy Law, Illinois


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 6 years ago | Contributor

Nothing good happens. Depending on where exactly you are in the bankruptcy process (for example: has the plan been confirmed by the court yet or not?), you could have confirmation of the plan denied; have the automatic "stay" (or bar on collections actions) lifted, so creditors can take collections actions (such as repossession or foreclosure); or even have the bankruptcy case dismissed entirely. To think about it simply: violating or breaching your obligations under the plan can potentially result in not getting the benefit of having filed bankruptcy.

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