If you are going through a difficult financial situation, you may have chosen to take the route of using Chapter 13 bankruptcy in Central New York. This type of bankruptcy plan, also called reorganization bankruptcy, allows you to create a realistic payment plan that addresses your debt.
At Grady PK, PLLC, our goal is to provide our clients with clear and compassionate guidance that helps them find a solution for their situation. We can work alongside you to find the best bankruptcy option that is suitable for your situation and set up a payment plan that you can afford. In this article, we will discuss what happens if you miss a Chapter 13 bankruptcy payment and the possible solutions that are available. For further assistance with your bankruptcy case, call our office today to speak with a compassionate bankruptcy attorney.
Missing Chapter 13 Payments
It is not uncommon for individuals in Central New York to run into the issue of late Chapter 13 bankruptcy payments. You may even struggle to make your payments altogether if your financial situation is especially tight at the moment. Chapter 13 payments are usually created with the individual in mind, but conditions change, and it may become harder and harder to make your monthly payments on time.
The good news is that nothing bad will usually happen if you miss a chapter 13 payment one time as this is quite common. However, if you miss more than one payment the bank trustee has the right to file a motion to dismiss. A motion to dismiss asks the bankruptcy court to dismiss your chapter 13 case, which will result in a scheduled hearing with a bankruptcy judge.
During the bankruptcy hearing, the judge will want an explanation regarding why you have missed payments so that they can decide on a resolution. Here are some possible repercussions that you may face for missed Chapter 13 payments:
- Your Chapter 13 case could be dismissed entirely, which would require you to re-file your case all over again.
- The court may convert your case to a Chapter 7 bankruptcy, which would remove your repayment plan.
- The court may adjust your Chapter 13 repayment plan with an abatement or by lowering the monthly payment amount.
Something to keep in mind is that every bank trustee and district is going to handle missed payments differently. Some may file a motion to dismiss after you missed the first payment, or they may give you several chances to catch up before reacting. The best thing to do if you know you cannot make a payment is to reach out to your attorney to come up with a solution before late payments start to stack up.
Is There a Grace Period For Chapter 13 Payments?
A drawback to Chapter 13 is that there is no grace period when it comes to Chapter 13 late payments or missed payments. Thirty days after your case is granted, your first payment will be expected and any payment that falls 30 days behind will be considered a missed payment.
Solutions For Fixing Missed Chapter 13 Payments
For many people, having a Chapter 13 bankruptcy payment plan is the perfect option if they are in a tight financial situation with substantial debt. It provides you with a structured payment plan that is usually set at a realistic amount for the money you are bringing in. However, if you miss a Chapter 13 bankruptcy payment and find that you are falling behind, there are some solutions that can help you get back on track.
- Catch up on payments: If the bank trustee has not filed a motion to dismiss and you have the money, you may be able to quickly catch up on payments. However, you should not go into more debt to do this if you do not have the money on hand.
- Temporarily suspend payments: You have the option of requesting not to make your payments for a period of time if you are financially unable to continue with your plan. A skilled bankruptcy attorney will be able to help you file a motion with the bankruptcy court to have a temporary suspension put on your plan due to undue hardship.
- Amend your Chapter 13 repayment plan: There is also the option of filing a motion to modify your repayment plan as a way of addressing any missed payments you have.
If the bank trustee does file a motion to dismiss, you should try to stay calm and level-headed. Even if the court dismisses your case entirely or changes it to a Chapter 7 bankruptcy plan, there is always a way of moving forward. The best case scenario is that the court will lower your payment plan for you without you having to ask for an amendment or a temporary suspension.
A bankruptcy attorney in Central New York will be able to help you address any changes that are made to your plan or re-file if necessary. They can help you present your case to the bankruptcy judge to better explain your financial situation and the reason for the missed payments.
Central New York’s Top Compassionate Bankruptcy Attorney
Managing Chapter 13 bankruptcy payments can feel overwhelming, but there are many viable solutions available that can help you keep up with your payment plan. At Grady BK, PLLC, we can help you navigate the details of your Chapter 13 bankruptcy plan with confidence and peace of mind. Having a local Central New York bankruptcy attorney on your side provides you with personalized advice and bankruptcy assistance that is tailored to meet your financial needs.
At Grady BK, PLLC, we understand how stressful bankruptcy can be, which is why we focus on a compassionate approach catered to each individual. We will help you better understand your Chapter 13 bankruptcy plan and find the best way of approaching monthly payments so that you do not have to repeat late Chapter 13 payments.
Contact us today at 315-299-9005 to discuss your situation with a bankruptcy attorney. Our team at Grady BK, PLLC is ready to provide you with the assistance you need whether you are filing for bankruptcy or need help managing your chapter 13 bankruptcy repayment plan.
