Are payments on secured debts suspended in a Chapter 11 bankruptcy?

In Washington, payments on secured debts are generally not suspended in a Chapter 11 bankruptcy. Chapter 11 bankruptcy is a court-approved reorganization of a debtor’s financial affairs, usually involving debt restructuring or repayment plans. In a Chapter 11 bankruptcy, the debtor may seek to reduce the amount of secured debts owed or to restructure or extend the repayment terms of the debt. All payments on secured debts must be kept current during the bankruptcy process, unless the court approves a modification of the payment schedule. This means that secured debt payments must be made on time during the bankruptcy process and cannot be missed or delayed. The debtor’s creditors may agree to a plan proposed by the debtor to reorganize or restructure the payments on the debt. If the court approves the plan, payment terms on the secured debts would be modified. However, if the court does not approve the plan, the debtor must still continue to make timely payments on the secured debts. Thus, in a Chapter 11 bankruptcy in Washington, payments on secured debts are generally not suspended. The debtor may seek to restructure or modify the payments on the secured debt, but the payments must be kept current during the entire bankruptcy process.

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Are payments on secured debts suspended in a Chapter 11 bankruptcy?

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