Will I lose my bankruptcy protection if I missed some payments required by my Chapter 13 bankruptcy plan?
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UPDATED: Jun 29, 2022
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If you can’t make your Chapter 13 bankruptcy payments, call your bankruptcy lawyer immediately. Missing bankruptcy payments is not an uncommon problem, and it can sometimes be fixed, but ignoring it will make it worse.
Your bankruptcy trustee will usually move to dismiss the case after you miss two payments. In some cases, you can make up the payments. If this is an option, the trustee will usually not seek dismissal of the bankruptcy. If you can’t make up the payments right away, you may have some other options, but you’ll need to talk to your bankruptcy attorney to determine which is best for you. If your plan is less than 60 months, you may be able to extend the length of the plan to incorporate the missed payments and additional charges. A Chapter 13 plan cannot be extended to more than 60 months, so if your plan is already 60 months, you can’t extend it further, but you may be able to increase the remaining plan payments by the amount needed. In some cases, you may be able to give up some secured property (usually a car) for which payments are being made under the plan. The property will reduce the debt that it secured, and the money saved on that debt can be used to catch you up. In some cases, the only option may be to allow the case to be dismissed and re-file Chapter 13 to get an additional 60 months to make all required payments.
If something has dramatically changed with your finances or your health (i.e. you have since become disabled), you may qualify for other options like a hardship discharge or converting your filing to a Chapter 7. The decision to re-file or convert can have a significant impact on your prior exemptions, so be sure to review all of your options with your attorney before you make a final decision.