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Simon, Fitzgerald, Cooke, Reed and Welch
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Missed a payment? Here's what happens in Chapter 13 bankruptcy

If you are entering into Chapter 13 bankruptcy, it is important that you know what happens if you miss a payment. Missing a payment is a significant issue, because you need to make sure everyone is paid on time. If you miss a payment, there is a chance that your case could be dismissed.

The good news is that a single missed payment isn't the end of the world if you're quick about fixing your mistake. If you can make the payment before your trustee has to make the payments that they pay out once a month, then your trustee may not even notice that it was late. However, if you don't make it before the payments are due, you could be in trouble.

What should you do if you're going to be late with a Chapter 13 bankruptcy payment?

If you know you're going to be late, you should reach out to the court or trustee directly. There may be a grace period for the payment or a chance to defend yourself if you can't make the payment for a good reason. The most important thing is to be honest and to talk to your attorney about your options before the payment is late. Once it is, you should make it as soon as possible.

Keep in mind that the trustee for your case might want to seek wage garnishment if you can't make a payment on time or fail to do so more than once. If that happens, you could have your wages taken before you ever see them. It's best to avoid making late payments so that this doesn't become a possibility.

How can you avoid Chapter 13 bankruptcy payment issues?

For some people, wage garnishments are the best option, since they don't have to remember to pay a bill. However, it's better just to make payments biweekly or as you're paid. Whether you split the bill and pay your trustee in two payments or choose to pay one lump sum, you have to make sure it's all there by the deadline. If it isn't, then the trustee can seek wage garnishment as the way to obtain your payments.

One of the best things you can do is to get a month ahead on payments by paying it before it's due. For example, if it's due on the 30th of the month, try to pay at the beginning of the month. Then, you have a whole month to plan for the next payment.

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