DId you miss a Chapter 13 plan payment?
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Chapter 13 can be a great opportunity for Garner bankruptcy filers to get out of debt and catch up on past-due balances on mortgage or car loan. For those who earn too much or have too many assets to file Chapter 7, this is often the best way to get your finances back on track. But what if you make a misstep with your North Carolina bankruptcy? If you miss a Chapter 13 repayment plan installment, what happens?
#1 Your Plan May Not be Confirmed
When Garner, NC consumers file Chapter 13 bankruptcy, the repayment plan is submitted to the trustee and the court, and you typically begin making payments on the plan even before it’s even reviewed and accepted by the court. If you miss a payment, you might find your confirmation will be further delayed or rejected, in which case you must start over or make another plan to deal with your debt.
#2 Your Plan Might be Dismissed
Garner bankruptcy plans depend on you making all of your payments on time as proposed in the court documents. If you fall behind, then you’re breaking your agreement, and the trustee will ask the court to dismiss your Chapter 13 case. That means you will have to start all over again.
#3 Debt Collectors Might Start Calling
When you file Chapter 13 bankruptcy, one of the benefits is the automatic termination of collections calls, but if your repayment plan flops, the court may not shield you from debt collectors. Plus, if your Garner bankruptcy plan is dismissed by the court, it will be open season, and you can expect your creditors and debt collectors to try to force you to pay your debt.
What Can Garner Consumers Do if They Miss a Chapter 13 Plan Payment?
Missing just one payment on your Chapter 13 plan won’t necessarily mean your bankruptcy will be dismissed by the court. However, missing more than one is definite trouble. There are five options available to deal with a missed payment plan.
#1 Modify the Plan
Your attorney can request that the repayment plan be modified if your income has dropped or your expenses have increased such that your plan is no longer a match for your circumstances.
#2 Make Up the Missed Payment
If you had a one-time glitch and can make up the missed payment, then you should be able to get your plan back on track without having to make any special requests of the court or your trustee.
#3 Request a Reinstatement
If your bankruptcy was dismissed, you might be able to request that it be reinstated. That way, you can pick up where you left off when you get current on your payments and make the request soon after dismissal.
#4 Convert the Plan
If you can’t afford a Chapter 13, you might be able to convert to a Chapter 7 bankruptcy, which offers more complete debt relief and can be accomplished much faster than a Chapter 13.
#5 Request a Hardship Discharge
Hardship discharges are difficult to get. Essentially, you tell the court that you can’t afford your repayment plan and ask them to discharge your debt anyway. If you are unable to get a hardship discharge, consider aiming for a plan conversion instead.
If you’re a Garner, North Carolina resident struggling to pay your bills, living paycheck to paycheck, and stuck behind on your mortgage and car payments, then Chapter 13 might be the debt solution for you. Contact the Law Offices of John T. Orcutt now for a free NC bankruptcy consultation.
Call +1-919-646-2654 now for a free consultation at one of our convenient locations in Raleigh, Durham, Fayetteville, Wilson, Greensboro, Garner or Wilmington.