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What Happens If You Miss a Chapter 13 Bankruptcy Payment?

If you miss a Chapter 13 bankruptcy payment, you could end up losing your property, not being able to discharge your remaining debts and having tax consequences. But even if you don't get sued by the creditors, there are still plenty of problems that can result from missing a Chapter 13 payment.

You may lose your property.

If you miss a payment and fail to file an answer, the court may deem you to have been discharged from the case. This could result in the loss of your property:

  • Property held by a trustee can be sold at auction to pay off creditors. The trustee will then distribute any remaining proceeds among all creditors who have claims against you (including those who did not receive their full amount).
  • Your personal assets may be liquidated if there are no other sources of funds available for distribution. A court-appointed accountant or forensic accountant might be appointed to determine whether these assets are worth anything—and if so, how much money would need to be paid back before they could be sold off in order for everyone involved (including yourself) get what they deserve!

You may also lose wages due from employers because they were unable to pay employees while they were waiting on paperwork regarding their positions being approved through bankruptcy proceedings; however this depends entirely upon whether or not any such payments were made during this time period as well as how long it took before receiving approval through legal means."

You may not be able to discharge your remaining debts.

If you miss a payment or fail to pay your debt in full, your bankruptcy will not be discharged.

You will have to pay the remaining debt and any combination of:

  • The penalty fee (if applicable)
  • The interest that accumulates on the unpaid balance. This is usually interest at 1% per month unless otherwise specified in the plan documents. If you have missed more than one payment in a row, this amount may be higher than 1%. For example: if you owe $10k at 3% interest rate and miss two payments, then it will cost you $200 extra per month ($3k total), plus whatever court fees were charged for discharging this case ($100).

There are tax consequences.

If you miss a chapter 13 payment, the IRS will charge taxes on any amount that is supposed to be paid in full. In addition to being charged interest and penalties, if you do not pay the full amount of your debt, there may be other consequences as well.

The IRS has different rules for calculating what constitutes an "amount" under bankruptcy laws than they do for calculating taxable income after being discharged from bankruptcy. What this means is that if you miss a chapter 13 payment and want to file again in another year, your total debt will likely exceed its original value by then due to inflation or interest rates (depending on how long ago it was filed). This means that even if all other provisions are met (including paying off all past-due amounts), there could still be additional taxes owed—even though no money actually changed hands!

Your family and friends could pay the price.

If you miss a chapter 13 payment, your family and friends could pay the price. They may be asked to pay your debt, sued for it or even garnished. Your property can also be taken away from them in order to satisfy any court-ordered payments. The IRS won't hesitate to seize assets belonging to people who owe back taxes or child support—even if they're not responsible for paying those debts themselves!

If you miss a bankruptcy payment but have no other financial obligations (such as student loans), then there's still a chance that creditors will go after their assets before seeking compensation from anyone else who owes money on behalf of their client (like an estranged spouse).

What you can expect if you miss a payment.

If you miss a Chapter 13 payment, you could be evicted from your home. You may be sued by your creditors, arrested and jailed for failure to pay debts in a timely manner. Your car could be repossessed or seized by the court-appointed trustee who holds it until the money is paid off with interest added to the principal amount owed on that vehicle.

You could lose your job if it was financed through credit cards or obtained through bankruptcy; this would also mean losing any health insurance coverage provided under such employment arrangements (unless there are other provisions made in the plan). If someone else purchased their own house using Chapter 13 bankruptcy protection as collateral for their loan from another lender before yours was filed but after you missed payments on theirs then they might repossess yours too!

Missing a Chapter 13 bankruptcy payment is bad news for anyone who files for bankruptcy.

Missing a Chapter 13 bankruptcy payment is bad news for anyone who files for bankruptcy. If you miss a payment in the middle of your case, there are several consequences that could follow:

  • Your property could be sold at auction and your debts discharged. This would mean that all of your unsecured debts would be wiped out and any remaining money left over after paying off these debts would not be taxed or garnished by the IRS.
  • You may not be able to discharge any remaining debts after missing one payment or more than six months without making any payments on time (excluding interest). This means all remaining debt from your original filing will still appear on your credit report as unpaid debt even though it has been discharged through bankruptcy.
  • Tax consequences will also arise if you do not file IRS Form 1040X every year indicating whether or not there have been changes made to income levels since last filing taxes (for example: an increase/decrease in wages). If such changes are made during this time period then they must also be reported as taxable income when applying for Chapter 13 discharge later down the road once everything has settled out completely into place within their lives thus allowing them access back into society again freely without having anything held over their heads anymore!


While you may be able to avoid the worst of the consequences if you miss your payment, there are still some factors that could cause problems for you and your family. For example, if you're behind on your mortgage payments or owe money in other types of debt, it's possible that lenders will start calling about them again. If this happens, then it may be necessary for creditors to pursue legal action against you—which could result in losing everything (including any money owed). For more information, contact us.