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Late payments in Chapter 13 situations

Although a bankruptcy is often pursued to reduce financial stress, some South Carolina residents may find that there can be further issues once their Chapter 13 bankruptcies are confirmed. While Chapter 7 allows for much unsecured debt to be discharged, a Chapter 13 case typically involves reorganizing such debts so that payments are more manageable. A trustee typically makes payments to the creditors in a case from the monthly plan payment madeby the debtor. It is possible for an individual to find that they cannot make their monthly payment on time.

In many cases, a late payment made in the same month that it is due may not be problematic. In some such situations, the payments made by the trustee will usually take place at the end of the month in question. However, difficulties are more likely to arise if the trustee is responsible for automobile and mortgage payment activity. Whereas an individual making a late loan payment for their home or automobile might make contact to explain the situation, a Chapter 13 trustee is not likely to communicate the circumstances to the creditor in question. Some Chapter 13 cases allow the debtor to continue handling their own house and car payments.

It is important for people to understand their rights and responsibilities when their bankruptcy is confirmed. It is also helpful to remember that a trustee could take action for payments delayed in excess of a month.

Before filing for Chapter 13, a debtor might find it helpful to discuss the potential outcomes with a bankruptcy lawyer. Certain preliminary steps are required before filing, including going through debt counseling. A lawyer may be able to provide helpful insights about strategies for getting rid of some debts before filing for bankruptcy.

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The Huggins Law Firm, PA

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