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Can Creditors Resume Collecting if You Miss Your Chapter 13 Bankruptcy Payments?

Filing for Chapter 13 bankruptcy can be an effective way to manage your debts and get back on track financially. However, it is crucial to keep up with your bankruptcy payments, as failing to do so can have serious consequences.

One question that often comes up after a debtor has missed a Chapter 13 bankruptcy payment is whether creditors can resume collecting if you miss the payment. Our Oakland Chapter 13 bankruptcy attorney at the Law Offices of Melanie Tavare assists debtors who struggle to keep up with payments under their repayment plan.

How Does Chapter 13 Bankruptcy Work?

To understand whether creditors can resume collecting if you miss your Chapter 13 bankruptcy payments, it is important to first understand how Chapter 13 bankruptcy works. In a Chapter 13 bankruptcy, you agree to a repayment plan that lasts between three and five years, according to the website maintained by the Administrative Office of the U.S. Courts. During this time, you make monthly payments to a bankruptcy trustee who distributes the funds to your creditors. Once the plan is completed, any remaining eligible debts are typically discharged.

What Happens if You Miss Your Chapter 13 Bankruptcy Payments?

If you miss a payment, your bankruptcy trustee may file a motion to dismiss your case. If the court grants the motion, your bankruptcy case will be dismissed, and your creditors can resume collection efforts against you. This means that they can resume calling you, sending letters, and even taking legal action to recover the debt. Additionally, any wages being garnished or assets being repossessed will likely resume.

However, missing a payment does not necessarily mean that your case will be dismissed. If you have a good reason for missing the payment, such as a sudden loss of income or a medical emergency, you may be able to file a motion to modify your repayment plan. This can help you get back on track and avoid the dismissal of your case and the resumption of creditor collection efforts.

Other Consequences of Missing Chapter 13 Bankruptcy Payments

It is also worth noting that even if your case is not dismissed, missing a payment can have other consequences. For example, your bankruptcy trustee may file a motion to convert your Chapter 13 bankruptcy to a Chapter 7 bankruptcy. This would mean that your assets would be sold to pay your creditors, and any remaining eligible debts would be discharged. Chapter 7 bankruptcy can be a useful tool for some people, but it is generally seen as less desirable than Chapter 13 bankruptcy, as it can have a more significant impact on your credit score and financial future.

Discuss Your Legal Options with a Bankruptcy Lawyer

If you miss your Chapter 13 bankruptcy payments, creditors can resume collecting if your case is dismissed, and there can be other consequences as well. However, if you have a good reason for missing the payment, you may be able to modify your repayment plan and avoid these penalties.

If you are struggling to keep up with your bankruptcy payments, you might want to speak with a skilled bankruptcy attorney to explore your options. Our attorney at the Law Offices of Melanie Tavare can explain your options to avoid potential problems due to missing payments on your plan. Call 510-255-4646 to receive a confidential consultation. 

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"Melanie is the best she very responsive and helpful throughout the process everything was taken care of smoothly. If you are thinking of going through bankruptcy she is the best attorney for you. I will forever be grateful having the chance to work with her. She is very honest too."


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"What I liked about working with Melanie was how prompt and easy to work with she was. She made the process clear and understandable with as little stress as possible. I would work with her again and recommend her to others."