What happens to late payments during Chapter 13 Bankruptcy?

In Washington, Chapter 13 Bankruptcy Law dictates how debtors will deal with late payments. Essentially, the Chapter 13 Bankruptcy plan requires that all creditors who are owed money by the debtor must be paid at least a portion of the debt by the debtor. This is accomplished by establishing a repayment plan that sets up a payment schedule the debtor must abide by. Therefore, all creditors must have their past-due payments paid according to the repayment plan set up in the Chapter 13 Bankruptcy. Any creditors that were not paid by the deadline in the repayment plan will still be required to be paid by the debtor in the plan. So if a debtor is late on a payment, the creditor must still be paid according to the repayment plan. The debtor may be able to obtain a "hardship discharge," which allows them to be excused from having to make some of the payments due under the plan. However, this can only be requested after the debtor has made payments for at least three years. If the debtor fails to make any of the payments as outlined in the plan, then the creditor can take the debtor back to bankruptcy court to seek relief. This could mean that the debtor must give up property or assets or refile the case all together. Overall, Chapter 13 Bankruptcy Law dictates that all creditors must be paid according to the repayment plan set up in the Chapter 13 Bankruptcy, regardless if a payment is late. If a payment is not made on time, the debtor may be asked to give up some of their property or assets, or even have to refile the case altogether.

What happens to late payments during Chapter 13 Bankruptcy?

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