What happens when I fail to make a payment in a Chapter 11 bankruptcy?

When you fail to make a payment in a Chapter 11 bankruptcy, the court may take legal action against you. The court can order you to make the payments on time or face penalties, such as a wage garnishment or other forms of creditor enforcement. If you fail to make the payments within the specified time frame, the court may dismiss the case and your bankruptcy will be discharged. When the case is dismissed, the creditors can continue their collection efforts against you. This means that they can still take legal action to recover the money you owe them, such as calling you, filing a lawsuit against you, putting a lien on any of your property, or attempting to garnish your wages. If the court determines that your failure to make payments was due to bad faith, willful neglect, or recklessness, it can also impose additional sanctions on you. These could include fines, jail time, or court costs. It is also possible that the debt discharged in the bankruptcy will remain on your credit report for up to ten years, damaging your credit score. It is very important to make all payments on time in Chapter 11 bankruptcy to avoid legal action and consequences. If you are having difficulties making your payments, contact your bankruptcy attorney or consider speaking with a financial advisor to find alternative ways to meet your financial obligations.

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What happens when I fail to make a payment in a Chapter 11 bankruptcy?

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