If you stop making Chapter 13 payments and do nothing else, your bankruptcy case will be dismissed and the court will not enter a discharge order. This means you will lose the benefits of your bankruptcy and will no longer be protected from your creditors.
When your bankruptcy case was filed, the court entered a stay order stopping your creditors from taking any action against you. When a case is dismissed the stay order disappears and creditors can resume collection efforts. Without the stay order or a bankruptcy discharge, creditors can sue you, garnish your wages or take your property to pay debts.
Normally, when your Chapter 13 plan is completed, the court enters an order discharging all of your dischargeable debts. The discharge order permanently prevents your creditors from taking action to collect from you. To complete the plan successfully, you must make all payments required by the plan. If the case is dismissed before you complete the plan, you will not receive a discharge. If no discharge is entered your creditors are free to collect once the case is dismissed and the stay order is dissolved.
If you can no longer make the payments required by your plan, there are things your lawyer can do to help you. First, your lawyer may be able to modify your Chapter 13 plan and reduce the amount of your payments. Second, it may be possible to convert your Chapter 13 to a Chapter 7 case if you otherwise qualify. Third, you may qualify for an early discharge under hardship conditions. Finally, it may be possible to file a second bankruptcy case if the one you originally filed is dismissed.
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