What happens if I fail to meet the terms of my repayment plan in a Chapter 11 bankruptcy?

If you fail to meet the terms of your repayment plan in a Chapter 11 bankruptcy, the court may dismiss your case, which means that all of your debts would be owed as if you had never filed for bankruptcy. Depending on the circumstances, the court may also convert your case to a Chapter 7 bankruptcy, in which your assets would be liquidated to satisfy your creditors instead of working out a repayment plan. If you are unable to make payments due to a financial setback, such as unemployment, you may be able to modify your repayment plan or the terms of your loan to make it more affordable. This is known as a “hardship discharge.” In this case, the court may reduce the amount you owe, extend the payment period, or even waive certain debts altogether. If you fail to make payments, the court can also hold you in contempt, which means that you would face fines or jail time. Your attorney can help you determine if this is the best course of action for your particular situation. Finally, if your Chapter 11 repayment plan was approved by the court, your creditors cannot harass you for payment or attempt to collect any debts that have been discharged in the bankruptcy. The court will act as a mediator to ensure that the terms of your repayment plan are followed.

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What happens if I fail to meet the terms of my repayment plan in a Chapter 11 bankruptcy?

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