payment

Late on Chapter 13 bankruptcy payment. What now?

Late on Chapter 13 bankruptcy payment. What now?

Key takeaways

  • The court could dismiss your case or change it to a Chapter 7 if you’re late on your payment.

  • You can request a payment reduction if you’ve been faced with an unexpected financial hardship.

  • If you miss a payment or think you could be late in the future, reach out to your bankruptcy trustee or your attorney immediately and let them know.

chapter-13/?mf_ct_campaign=aol-synd-feed&utm_content=syndication#:~:text=The%20Bankrate%20promise&text=Chapter%2013%20(also%20called%20a,from%20three%20to%20five%20years.” data-ylk=”slk:Chapter 13 bankruptcy;elm:context_link;itc:0″ class=”link rapid-noclick-resp”Chapter 13 bankruptcy, also known as reorganization bankruptcy, is a legal process that allows you to restructure debt to be more manageable. As part of the process, you will be required to pay creditors a portion of the outstanding debt over three to five years during what’s known as the repayment period.

At the end of the repayment plan, any remaining debt you have left will be “discharged” — meaning you are no longer responsible for paying it. In most cases, being a few weeks late on your Chapter 13 payments isn’t a problem, but delays of longer than a month can impact your chances of a successful discharge.

What happens if you miss a Chapter 13 plan payment?

Skipping a Chapter 13 plan payment can negatively impact

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December 16, 2023 by ATTORNEY

Limiting ‘preference’ liability exposure in bankruptcy

Limiting ‘preference’ liability exposure in bankruptcy
Limiting ‘preference’ liability exposure in bankruptcy

Joe Foster

As the saying goes, what goes up, must come down. After years of robust growth, the U.S. economy appears to be hitting a rough patch. In the coming months, it is likely that some businesses will not survive the challenges that lie ahead, and will be forced to file bankruptcy.

As bankruptcy attorneys, we find that one of the most difficult issues to explain to a client is receipt of a demand letter from a bankruptcy trustee seeking return of payments from a customer received months or years before. To add insult to injury, the customer, now a debtor in bankruptcy, often still owes the client. In addition, the letter typically includes a threat that if the payment is not returned, the trustee will file a lawsuit.

This claim by the trustee is referred to as a “preference” action. The intent of the law is to prohibit insolvent companies from playing favorites or preferring a particular vendor over another. Preference claims force the so-called “preferred” vendor to return the payment so that all general creditors can enjoy equality of treatment.

A preference claim is, unfortunately, very simple to bring and very easy to prove. To successfully assert the

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September 5, 2022 by ATTORNEY
December 2024
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