Obtaining a Chapter 13 bankruptcy resolution is difficult, and if you manage to secure your Chapter 13 resolution, it is vital to develop a solid plan for repaying the balance of your restructured debt. Defaulting, or failing to make your payments, can have severe financial consequences.
It’s possible for the court to dismiss your Chapter 13 bankruptcy filing if they deem your proposed repayment plan to be illogical or unfeasible. However, if you succeed in obtaining a resolution and fail to make your payments as required, the consequences can be severe. When you begin your Chapter 13 bankruptcy filing process, an automatic stay is placed on your debts that prevents creditors from continuing collection activities against you. If you fail to make your payments, creditors can file motions to have this automatic stay dismissed, effectively allowing them to continue collection activities against you.
If you lose the protection afforded by your automatic stay by defaulting on your payments, creditors can seek repossession of your belongings and even foreclosure on your home. Many people start on solid footing once they begin making Chapter 13 repayments, only to encounter unexpected circumstances that interfere with their ability to pay. If you find yourself in this situation, it is vital to consult your Orange County Chapter 13 attorney as soon as possible. In some cases, it is possible to modify your Chapter 13 resolution. However, it’s important to remember that modification may not be possible if you owe priority debts or debts on secured property that you do not want to surrender to your creditors.
It can be incredibly disheartening to hear that your Chapter 13 filing was dismissed, but this is not an entirely hopeless situation. Your Orange County Chapter 13 attorney can help you refile your Chapter 13 case as long as you did not violate any court orders or as long as your dismissal was not the result of your behavior. One important variable to remember about this situation is that if you refile your Chapter 13 case, the automatic stay will only last for 30 days if your refiled case is within one year of your first Chapter 13 filing, but you can request the court extend the automatic stay under certain conditions.