Lefkovitz & Lefkovitz
Nashville Office 615-686-2279 Cookeville Office 931-400-2218
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When a Chapter 13 bankruptcy payment is late

In some cases, Tennessee debtors who are in the middle of a Chapter 13 bankruptcy may find themselves in situations in which their required payments will be late. This can cause significant stress for debtors, as keeping to the set repayment plan is a condition for successful completion of a Chapter 13 proceeding.

Usually, if the payment is only a week or so late, it won't be an issue. It is possible that the trustee assigned to the case will not notice, especially because trustees normally send out the payments to creditors once a month. If the payment comes in before that date happens, the trustee is likely to just send the payments on as he or she normally does.

A different issue may happen if the person is paying his or her mortgage through the trustee. If the payment is late and the mortgage payment is due, the trustee will not be able to send the lender its payment. Some trustees will react aggressively in this situation, filing motions to dismiss the Chapter 13 case. If that happens, the debtor can file a motion opposing the dismissal, especially if the payment was eventually made even though it was slightly late. As long as the debtor normally makes payments on time, a single missed payment is unlikely to derail the Chapter 13 case.

Chapter 13 bankruptcy can provide many benefits to debtors, including stopping foreclosure actions on their homes. Because of its ability to help debtors achieve fresh financial starts, it is important for people to try their best to make their payments to the trustee on time. People who are interested in learning about Chapter 13 bankruptcy and what the process entails may want to meet with an attorney to learn what the eligibility requirements are.

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