What happens if you default on a Chapter 13 for failure to make monthly payments?
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What happens if you default on a Chapter 13 for failure to make monthly payments?
Asked on April 12, 2014 under Bankruptcy Law, Illinois
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 10 years ago | Contributor
Nothing good happens. Depending on where exactly you are in the bankruptcy process (for example: has the plan been confirmed by the court yet or not?), you could have confirmation of the plan denied; have the automatic "stay" (or bar on collections actions) lifted, so creditors can take collections actions (such as repossession or foreclosure); or even have the bankruptcy case dismissed entirely. To think about it simply: violating or breaching your obligations under the plan can potentially result in not getting the benefit of having filed bankruptcy.
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