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Default on Chapter 13 bankruptcy plan?

More information:

I live and own a business in Cambridge, Massachusetts. I filed chapter 13 bankruptcy almost a year ago and am now making payments under a payment plan. Now things aren’t going so well again and I worried I won’t be able to make the payments. So what will happen if a default on my payments under the chapter 13 plan? Are there fines or anything like that?

Bankruptcy Attorney Answer:

A large percentage of debtors drop out of their bankruptcy plan prior to discharge.  If you default on your payments under the bankruptcy plan, the bankruptcy trustee will request that the court dismiss your bankruptcy.  In that case, all of your creditors can resume their efforts to collect the money you owe, in any way allowed by the state of Massachusetts.  Do not default.  Talk to your bankruptcy attorney to see if  they can help you to seek an amendment to your chapter 13 plan.  Bankruptcy courts are more likely to allow amendments when there are dramatic changes in the debtor’s circumstances, such as a lost job.  Your bankruptcy lawyer might have other suggestions as well, such as surrendering a secured debt to reduce the payment.

The Cambridge MA bankruptcy lawyers at Esher Rossi will discuss your financial restructuring options. The bankruptcy lawyers at Esher Rossi serve all of Massachusetts including downtown Boston, the Greater Boston MetroWest region, Cape Cod and the cities of Boston, Cambridge, Cape Cod, Framingham, LowellNewton, and Worcester.

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