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

When you file for Chapter 11 bankruptcy in Washington, you must adhere to a repayment plan and make regular payments on your debt. If you fail to make a payment, a variety of consequences can occur. The court overseeing the case can decide to convert the case to a Chapter 7 bankruptcy, which means that the court would liquidate your assets in order to pay off your debt. This can lead to a loss of property, income, and savings. In addition, the court can deny or revoke the debtor’s discharge, which would make it impossible for them to be released from their debt and could result in lawsuits. The creditors can also take legal action against the debtor. They could file a motion for relief from the stay, which would allow them to start collections and take further action to try and recover the unpaid debt. Finally, the court can impose certain penalties such as fines or jail time. It is essential that you make all payments as per the terms of your repayment plan. If you are having trouble making a payment, you should contact your attorney and the court immediately. They may be able to renegotiate the repayment plan, provide you with assistance, or extend the timeline for payments.

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

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