Defaulting on Chapter 13 Bankruptcy
A Chapter 13 bankruptcy repayment plan can last anywhere from three to five years. In the course of a Chapter 13 bankruptcy plan a lot can happen. Losing a job, facing a salary reduction or even facing an illness can make it impossible to complete a Chapter 13 bankruptcy plan as it was originally designed. As we have repeatedly suggested, when facing any difficulty in paying your Chapter 13 bankruptcy plan you must notify your bankruptcy attorney immediately.
However, if you have already defaulted on your Chapter 13 bankruptcy plan by missing one or more payments, then below are a few tips on fixing the problem:
- Even if you have already missed several payments on your Chapter 13 bankruptcy plan, contact your bankruptcy attorney and thoroughly explain your situation. Did you have an accident? Sudden medical condition? Unexpected layoff? Whatever the case, you must help your bankruptcy attorney present an explanation to the bankruptcy court so they will give you a second chance.
- Once the bankruptcy court decides to give you second chance at your Chapter 13 bankruptcy, make sure you stick with the plan. You will need to pay back any default amount you owe, plus remain current on your payments -- which takes us to our next point.
- You must remain current on your Chapter 13 bankruptcy plan as you also make the payments you missed. This means that if you have a Chapter 13 bankruptcy plan that calls for a $300/month payment and you missed two months, you will need to pay back the $600 in missed payments plus pay $300/month. If you are unable to catch up on your defaulted payments at one time, you may want to ask the bankruptcy court for a bankruptcy plan modification which will allow you to pay back delinquent payments over time.
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