How are Missed Chapter 13 Payments Made Up?

This is a frequent question, and it’s best understood by learning more about the concept of the “plan base”. Let’s say that your Chapter 13 plan is for 60 months and that the payment is $1,000 per month. Then your plan base is $60,000. Obviously, this is a total of all of your payments over the course of the plan.

As discussed previously, in Western Pennsylvania, you’re required to make wage-deducted plan payments unless you’re self employed or have a fixed income.

But let’s say that you’re injured and off work for two months. If you can make a partial payment, then yes, absolutely, you should try and make any type of payment whatsoever. Yes, the Trustee will accept a partial payment.

There are numerous reasons you should try to make as much of a plan payment as possible. First, your mortgage or car loan is invariably being paid through your Chapter 13 plan, so you don’t want to short-change either of those two types of secured loans.

Second, even if you could make a $500 payment during those two months, then at least you’ve made some headway toward paying off your plan base. This should make sense.

Unfortunately, if you’re in the final months of your Chapter 13 and you start to miss payments, then you might be out of luck. The reason is that you don’t have many months left in which to make up the payments.

Let’s say that you miss two payments in Year One of your Chapter 13. Yes, that’s a problem, but you might be able to overcome it. You resume making regular payments in the third month, and you can start catching up on the missed $2,000 over the next 48 months.

But if you’re in Month 48 of your Chapter 13 case, now you only have 12 months left to catch up on the missed $2,000. Hmm, that could be tough.

The Bankruptcy Code does not permit Chapter 13 plans to run for longer than 60 months, but in practice, it sometimes happens, and particularly if you have a small delinquency. No, the Trustee and the Judges are not that hard-hearted. But you don’t want to run into that type of scenario.

Let me know if you have other Chapter 13 questions. Thanks.

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