What Happens if You Fall Behind on Chapter 13 Plan Payments?

 Posted on March 22, 2026 in Chapter 13 Bankruptcy

Life doesn't always go according to plan. Job loss, a medical emergency, or an unexpected expense can make it hard to keep up with your Chapter 13 payments, even when you had every intention of following through. If you have fallen behind on your payments, the good news is that you might have more options than you think.

According to the U.S. Courts, if a debtor fails to make payments under a confirmed Chapter 13 plan, the court may dismiss the case or convert it to a Chapter 7 liquidation case. However, there are steps you can take to prevent either outcome. If you are struggling with Chapter 13 payments in 2026, a Montgomery County, MD bankruptcy lawyer can help you understand your options and protect what you have worked hard to keep.

What Happens When You Miss a Chapter 13 Payment?

Missing a single payment does not automatically end your case. But it does put you at risk, and the trustee assigned to your case will take notice. If you fall significantly behind, the trustee may file a motion to dismiss your case. Once that happens, the protection you have been receiving against creditors, called the automatic stay, can be lifted, and collection actions like foreclosure, repossession, and wage garnishment can resume.

Under 11 U.S.C. § 1307, the court has the authority to dismiss a Chapter 13 case or convert it to a Chapter 7 bankruptcy if a debtor fails to make plan payments. Dismissal means losing your bankruptcy protections. Conversion to Chapter 7 means your non-exempt assets could be liquidated to pay creditors. Acting quickly when you fall behind gives you the best chance of avoiding both.

Can You Catch Up on Missed Chapter 13 Payments?

If you have missed one or two payments, you may be able to catch up by making a larger payment the following month or entering into an agreement with the trustee to cure the arrears over a short period of time. The sooner you address the problem, the more flexibility you are likely to have.

The trustee is not looking to punish you. The goal of Chapter 13 is to help you complete your repayment plan. If you communicate early and honestly about what has changed, there is often room to work something out before a motion to dismiss is filed.

Can You Modify Your Chapter 13 Plan if Your Situation Has Changed?

Under 11 U.S.C. § 1329, you have the right to request a modification of your Chapter 13 plan after it has been confirmed. A modification can reduce your monthly payment amount, extend the length of your plan, or adjust how certain debts are treated, depending on what has changed in your financial situation.

Common reasons people seek a plan modification include a reduction in income, a change in employment, a medical emergency, or a significant unexpected expense. The modification must still meet the basic requirements of the Bankruptcy Code, and not every request will be approved. However, for many people, this is a far better outcome than having their case dismissed.

What Steps Should You Take if You Are Falling Behind on Chapter 13 Payments?

If you know you are going to miss a payment or have already missed one, do not wait to act. The steps you take in the early stages can significantly affect the outcome. These include:

• Contact your bankruptcy attorney right away to discuss what has changed and what your options are.

• Communicate with the trustee before a motion to dismiss is filed, if possible.

• Gather documentation showing why you fell behind, such as a termination letter, medical records, or other proof of hardship.

• Explore whether a plan modification is appropriate given your current financial situation.

• Find out whether converting to Chapter 7 might be a better option depending on your circumstances.

The worst thing you can do is ignore the problem and hope it resolves itself. Chapter 13 requires active participation. Early action almost always leads to better outcomes.

Contact Our Bowie, MD Bankruptcy Attorney Today

Falling behind on your Chapter 13 payments does not have to mean the end of your case or your financial fresh start. At Bloc One Services, LLC, Attorney Blocton understands what it feels like to face financial hardship because she has seen it up close in the lives of the people she serves every day. She is committed to providing the local community with quality legal help at fair and reasonable prices, and she takes pride in working as an attorney whom real people can relate to and trust. She is, simply put, the People's Attorney.

If you are struggling with your Chapter 13 plan, contact our Montgomery County, MD bankruptcy lawyer today. Call 240-200-0076 to learn more about how we can help.