Making the decision to file for bankruptcy is seldom easy. However, if debt is weighing someone down and interfering with one’s quality of life, a person in South Carolina may have few alternatives. Filing for Chapter 13 bankruptcy typically results in a court-approved payment plan. If all goes well, within a few years, that person will have a much brighter financial future. However, what happens if the filer is late with a payment?

With Chapter 13, typically, the filer sends one check each month to a court-appointed trustee. That trustee distributes the money to the creditors who are included in the payment plan. In many cases, the trustee makes those payments once a month, and it may not be a problem if the filer’s check is a few days late. However, this is not always the case.

If a mortgage or car loan is included in the payment plan, the trustee is not likely to make excuses to those creditors if the payment is late. In fact, in some cases, a trustee may file a motion to dismiss the bankruptcy, leaving the person in the same or worse position than he or she was in before filing for debt relief. Another action a trustee may take if payments are late is to garnish the filer’s wages, causing even more stress.

Keeping up with Chapter 13 bankruptcy payments is essential to the successful completion of the proceedings. Those in South Carolina who struggle with their payments will likely benefit by contacting an attorney for advice and guidance. If serious financial issues have arisen since the approval of the bankruptcy plan, an attorney may be able to file for a modification of payments.

Source: bankrate.com, “Is late Chapter 13 payment OK?”, Justin Harelik, Accessed on May 5, 2017