One of the most challenging aspects of an Arizona Chapter 13 bankruptcy case is successfully completing thethree or five year repayment plan. Despite many people’s best efforts, some will eventually fall behind in their payments and find themselves facing a potential dismissal of their case. In today’s Bankruptcy Aftermath, we will focus on the aftermath of an unsuccessful repayment plan.
Despite our best intentions, life often gets in the way; oftentimes, it will get in the way of some very important commitments like your Chapter 13 bankruptcy repayment plan. While bankruptcy courts and lawyer will do their best to ensure that you are financially able to commit to the plan, it can be hard to predict what may happen to you over the course of three to five years. A family death, serious illness, divorce, or job loss can take a financially sound person and turn their life upside down.
So what will happen to you when the unexpected causes you to fall behind on your repayment plan? The bankruptcy trustee may be forced to dismiss your case, which means that your creditors will once again be able to come after you for collection purposes.
The good news is that your hands are not completely tied. If your financial setback was only temporary, you may be able to convince the trustee—prior to your case being officially dismissed—that your case should be reinstated. If you are able to prove that you will be able to get current on your payments and complete the plan, your case may be reinstated.
If your case is dismissed, you will be able to refile, but you will not enjoy the same benefits you did under your first filing. Your automatic stay (that impenetrable shield from creditors) will only last for 30 days unless you file a motion that proves your refiling is in good faith, and that your finances have changed for the better.
If you have fallen behind in your repayment plan and are facing a dismissal, the time to act is now. The Phoenix Chapter 13 bankruptcy attorneys at Curry, Pearson & Wooten are available today to take action on your case, and help ensure that you do not lose the ground you worked so hard to gain during your repayment plan. Call us now at 602-258-1000 to find out how our law firm can help you.