What Happens if Your Chapter 13 Bankruptcy is Dismissed?

A lot of people don’t like the thought of having to go with a Chapter 13 Bankruptcy, because it means they still have to pay their debts. Once a constructive payment plan has been put into place and sanctioned by the courts the individual feels much better about their financial situation, and sees that the 

A lot of people don’t like the thought of having to go with a Chapter 13 Bankruptcy, because it means they still have to pay their debts. Once a constructive payment plan has been put into place and sanctioned by the courts the individual feels much better about their financial situation, and sees that the Chapter 13 Bankruptcy was a viable solution.

There are times when individuals fail to meet the obligations of following the payment plan for the Chapter 13 Bankruptcy. When this happens the Bankruptcy often becomes dismissed. There can be several reasons why the plan was not honored. The individual’s financial situation may have changed where there is not the same amount of income being generated. Or, illness is preventing them from working.

It is highly important that if a financial situation is changing for the worse for an individual that is in a Chapter 13 Bankruptcy that they immediately notify the courts of this. A Bankruptcy Attorney can ask the Bankruptcy judge to modify the plans to fit the current financial situation. There may also be a possibility where the individual now qualifies for a Chapter 7 Bankruptcy. In this case the legal professional can assist with having the Chapter 13 bankruptcy dismissed, then file for a Chapter 7 Bankruptcy relief.

If the Chapter 13 bankruptcy is dismissed then the creditors have the option to start making attempts to collect what is owed to them. It is important to act quickly once the Chapter 13 has been dismissed.