Will My Chapter 13 Case Get Dismissed or Canceled If I Miss Payments?
Are you wondering about Chapter 13 Missed Payments? Your Chapter 13 case will get dismissed very quickly if you do not make on-time, monthly payments. Your case will be canceled and all of your creditors will be able to come back after you. It is very important that you get into the new rhythm of making the payment on time each month. You should also monitor any automatic payment such as E-pay or wage assignment in order to make sure it is working properly.
If your case has Chapter 13 missed payments, the Trustee will usually file a Motion to Dismiss your case after your payments are 1-3 months behind. Only a very small amount must behind before they will dismiss your case! Keep in mind that you must stay completely up to date for the entirety of your plan.
Can Any Behind Chapter 13 Cases Be Saved?
Sometimes cases that get behind can be saved. These cases can be saved by objecting to the motion to dismiss and then modifying the plan. However, this does not work on all cases. In addition, your monthly plan payment will usually have to increase in order to make up the difference in what you did not pay.
The trustee will usually never change the total amount that you must pay in the plan’s life if you get behind. If your case even can be saved, it will only get more expensive for the rest of the months during the plan.
If you are currently paying your normal mortgage payment through the plan, getting behind is even worse in such cases. It is very hard to modify a case where your mortgage is behind because it could cause a situation where there would not be enough money for the Trustee to make your mortgage payment each month.
What if You Have a Very Large Drop of Income During Chapter 13?
If you have a very large drop in income, you may be able to switch your case to Chapter 7. This will allow you to get a full release from all of your normal-type debts. You will not be required to pay these debts any longer in Chapter 7. You could just get them fully discharged by switching over to Chapter 7.
Remember, Chapter 7 cases can only be filed every 8 years. If you have filed Chapter 7 any time in the last 8 years, you cannot switch your case over to Chapter 7. You would still be required to wait until 8 years have passed from your old Chapter 7 case.