Chapter 13 bankruptcy gives you a court-approved plan for paying debts over time. You generally make regular payments to a Chapter 13 trustee, who distributes the money to creditors. Tyler bankruptcy cases are generally handled in the Tyler Division of the U.S. Bankruptcy Court for the Eastern District of Texas. The court identifies a Tyler divisional office and provides local Chapter 13 forms and procedures.
Missing a payment does not automatically end your bankruptcy case. However, falling behind can create problems with your repayment plan. The result may depend on how many payments you missed, why you missed them and whether you can catch up.
What can happen after a missed payment?
A missed payment can put your Chapter 13 plan behind. If the problem continues, the trustee or a creditor may ask the bankruptcy court to dismiss your case. A dismissal can end the protections that came with your bankruptcy filing and allow creditors to resume collection efforts.
Depending on your situation, possible ways to address missed payments may include:
- Catching up on missed payments: Bringing the plan current can help you continue with the existing repayment schedule.
- Requesting a plan change: A change in income or expenses may support a request to modify the plan. Under Section 1329, a modification can change payment amounts, payment duration or certain distributions. However, a modification is not automatic and must meet bankruptcy-law requirements.
- Requesting other temporary relief: Depending on the circumstances and local procedures, a debtor may ask the court for relief related to plan payments. Approval is not automatic, and the available remedy depends on the case.
The available option depends on the facts of your case and the requirements of the bankruptcy court. Legal assistance can help you review the reason for the missed payments and determine which options may apply to your Chapter 13 plan.
Why the timing matters
A missed payment can become more serious when several payments go unpaid. For example, losing income or facing an unexpected major expense can make it harder to keep up with a three- to five-year repayment plan. Chapter 13 cases depend on continued payments, so addressing a payment problem early may help prevent the case from reaching dismissal.
Keeping your plan on track
Missing one payment does not necessarily mean your Chapter 13 case is over. Still, falling further behind can put your bankruptcy case at risk. Knowing how missed payments may affect your case can help you recognize the problem before it affects the rest of your repayment plan.
