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Default on Chapter 13 bankruptcy plan?

I filed chapter 13 bankruptcy almost a year ago and am now making payments under a payment plan. Now things aren't going so well again and I worried I won't be able to make the payments. So what will happen if a default on my payments under the chapter 13 plan? Are there fines or anything like that?

Chapter 13 plan

This is a very common issue.  Somewhere between 45% and 60% of debtors drop out of their plan prior to discharge, depending on whose numbers you believe.  If you default on your payments under the plan, the bankruptcy trustee will request that the court dismiss your bankruptcy.  In that case, all of your creditors can resume their efforts to collect the money you owe, in any way allowed by the state of Massachusetts.  Do not default.  Talk to your bankruptcy attorney ASAP to see if she can help you to seek an amendment to your chapter 13 plan.  Although you do not give many specifics, bankruptcy courts are more likely to allow amendments when there are dramatic changes in the debtor's circumstances, such as a lost job.  Your attorney might have other suggestions as well, such as surrendering a secured debt to reduce the payment.  Good luck. 

There are no fines; however,

There are no fines; however, if you continue to miss payments the Trustee will ask the judge to dismiss your case. At that point all your creditors will be told of the dismissal and your creditors will be free to come after you again.

Depending on your case if you cannot make the payments anymore, you may be able to ask for a hardship discharge or convert to chapter 7.

It would be best for you to discuss these options with your lawyer.

Good Luck,

Robert Kovacs
www.RKovacsLaw.com

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