A Chapter 13 bankruptcy may also be casually called a “wage earner’s bankruptcy” because it allows debtors with regular income streams to develop a plan to repay all or part of their debts. The Chapter 13 repayment plan may be considered a privilege you should not take for granted. Meaning, you must dutifully abide by it and make all your scheduled payments on time. Follow along to find out how late you can possibly be on a Chapter 13 payment and how a proficient Rockland County Chapter 13 bankruptcy attorney at The Law Offices of Allen A. Kolber, Esq., P.C. can help you avoid its potential consequences at all costs.
How late am I allowed to be on a Chapter 13 payment?
You must understand that there is no formal grace period when it comes to payments for the Chapter 13 repayment plan. Generally, you may have 30 days from the date on which you filed for Chapter 13 bankruptcy to make your first payment. From here, you may be expected to make biweekly or monthly payments, depending on the specific payment schedule the New York State bankruptcy court approved. Lastly, you may be expected to make these payments for the next three to five years, again, depending on the schedule the court approved.
What are the consequences of being late on a scheduled payment?
Failing to pay for a single scheduled Chapter 13 repayment may not necessarily be the end of the world. This is because if it simply slipped your mind or you had a particularly difficult time with your finances one month, you may be able to easily rectify the issue in the next month. However, problems may begin to arise once you miss two or three scheduled payments.
That is, being this far behind on your scheduled payments may prompt your bankruptcy trustee to file a Motion to Dismiss. Specifically, a Motion to Dismiss means that your Chapter 13 bankruptcy proceedings may be terminated at once. Subsequently, your bankruptcy dismissal may come with any or all of the following consequences:
- You may no longer be protected by an automatic stay, so your creditors may resume their collection activities.
- You may no longer qualify for a discharge of your debts, so you may now be held responsible for paying them off in full.
- You may no longer be relieved of any penalties or interests imposed on your debts, so you may now be held responsible for paying them off in full.
Of note, this may all be avoided if you simply speak with your trustee whenever you anticipate an upcoming missed or late payment. Importantly, you must have this conversation with a legal representative by your side. In conclusion, if you believe you need a nudge in the right direction, you should feel comfortable turning to a talented Rockland County bankruptcy attorney for aid. With that being said, do not hesitate to contact The Law Offices of Allen A. Kolber, Esq., P.C.
