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What if I am unable to complete my Chapter 13 bankruptcy?

On Behalf of | Mar 30, 2017 | Chapter 13

When you file for Chapter 13 bankruptcy in Tennessee, you work with the bankruptcy trustee to create a payment plan whereby your creditors get paid. At the end of the plan, once all of the payments have been made, your bankruptcy is completed and can be discharged. Unfortunately, some people are not able to make it all way to the end of the process. According to Yahoo, one study found that only 37 percent of Chapter 13 cases are fully completed.

The reasons some people cannot finish vary. Some may have suffered a job loss or other financial setback, while others may not have fully understood what they were getting into when they filed for bankruptcy. Regardless of the reason, if you stop making payments, you will run into several problems.

The first is your credit score. When you file for bankruptcy, your credit score takes a pretty steep initial hit. However, by making regular payments and eventually having your bankruptcy discharged, you can build your score back up again over time. If you do not complete the process, the dent in your credit score will be much harder to overcome. A low credit score can prevent you from gaining access to credit cards, loans and even some jobs.

In addition, if you stop making payments and the court dismisses your bankruptcy case, any creditors that you owe money to can once again come after you for any outstanding balances. This means your house, car and other possessions that were protected under bankruptcy would once again be at risk. Therefore, if you are having trouble with fulfilling your repayment plan, you may want to seek to have your plan modified rather than miss making payments. This is provided as general information on this topic and should not be considered legal advice.


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