What happens if I can't make a plan payment in Chapter 13?

If you do not make your plan payments, the trustee will ask the court to dismiss your case. If your case is dismissed, creditors will again to take all of their collection actions which may include foreclosure, repossession, garnishment, etc.

How soon the trustee will ask for dismissal depends on the trustee and the stage of your case. (Trustee's policies and court rules vary; those described below are those which we see most often.)

1. Before your case is confirmed. If you have made no plan payments by the time the trustee is to prepare his recommendation (about 90 days after the case is filed), he will lodge an order dismissing your case without any notice. If you have made some but not all payments, the trustee will include a requirement that payments be made by a certain date (usually within 30 days of the recommendation). If all payments are not made by that date, he can lodge an order dismissing the case without any further notice.
2. After your case has been confirmed. Usually the trustee will take no action on a case until two payments have been dismissed. If you miss only one payment, but make it up, the trustee will take no action. If you miss more than two payments, the trustee will file a Motion to Dismiss giving a specific amount of time (usually 30 days) for you to make up all the missed payments. If you do not make the payments within that time, the case will be dismissed without further notice.

What should I do if the Chapter 13 trustee has filed a Motion to Dismiss my case because I have missed plan payments?

If you can make up all the missed payments, get them to the trustee before the deadline (or hearing date) in the motion. The trustee will ordinarily withdraw his motion.

If you cannot make up the payments, you should schedule an appointment with your attorney to see about modifying your plan. Possible modifications include:

1. If your plan is less than 60 months, you may be able to add on the missed payment and modification charges to the end of your plan.
2. A Chapter 13 plan cannot be extended to more than 60 months. You may still be able to increase the remaining plan payments by the amount needed to pay the missed payments and modification charges.
3. You may be able to give up some secured property (usually a car) which is being paid by the plan. The amount which would have been paid to keep that property may be used to catch up plan payments and pay the modification charge.
4. In some cases, the only option may be to allow the case to be dismissed and re-file Chapter 13 to get an additional 60 months to make all required payments.

This page was last revised: 10/11/16