What Happens If You Miss A Chapter 13 Payment In Michigan?
Chapter 13 bankruptcy can feel like a lifeline when you’re drowning in debt. It gives you room to breathe, keeps creditors off your back, and lets you pay what you owe in a manageable way.
But what happens if life throws you a curveball and you miss a payment?
Don’t panic. A single slip doesn’t mean your case is over.
In this post, we’ll break down what happens if you miss a Chapter 13 payment in Michigan.
Immediate Consequences Of Missing A Chapter 13 Payment
The first thing to know is that one missed payment usually isn’t the end of the world.
The trustee assigned to your case keeps track of all payments. If you skip one, it will show up right away. Sometimes, nothing happens immediately.
You might just get a notice reminding you that you’re behind.
Other times, the trustee may reach out to your attorney to figure out what’s going on.
Now, if you make a habit of missing payments or ignore the issue, that’s when things start to get serious. The Chapter 13 process depends on you following the court-approved repayment plan. Falling behind can threaten the whole case.
Also Read: Chapter 13 Payment Plan Example
Think of it like missing payments on a car loan. One late payment might be forgiven, but several late payments will put you at risk of losing the deal entirely.
Risk Of A Case Dismissal
The biggest risk of not paying is dismissal of your case.
When your Chapter 13 case is dismissed, you lose the protection of the bankruptcy court.
That means creditors can start calling again, repossessions can resume, and lawsuits can move forward. Basically, all those collection activities that had been paused by the automatic stay are back on the table.
Michigan bankruptcy courts, like others across the country, don’t want to dismiss cases unless they have to. They prefer that repayment plans succeed.
But the trustee’s job is to make sure the plan runs smoothly. If you’re not making payments, they can file a motion to dismiss.
At that point, the court reviews your case.
If there’s no good explanation, dismissal becomes a very real possibility.
Also Read: Chapter 13 Dismissal Refund
What To Do If You Miss A Chapter 13 Payment?
Missing a payment doesn’t have to derail your entire case. Here’s what you should do if you’ve missed one:
#1 Contact Your Bankruptcy Attorney RIGHT AWAY
The very first thing you should do is call your attorney.
Don’t wait a few weeks hoping the problem disappears. Your attorney knows how trustees handle missed payments and can guide you through the right moves.
Sometimes, they can step in and stop the trustee from filing a motion to dismiss.
Other times, they may negotiate more time for you to catch up.
#2 Understand The Consequences
It’s tempting to brush off a late payment and promise yourself you’ll fix it “next month.” But the stakes are bigger than that.
A missed Chapter 13 payment doesn’t just create a late fee, it threatens the entire case.
If your case gets dismissed, you lose bankruptcy protection, and creditors can immediately resume collection efforts. That means phone calls, lawsuits, wage garnishments, and even foreclosure if you’re behind on your mortgage.
Understanding the seriousness of the situation will keep you focused.
Also Read: What Can You Not Do After Filing Chapter 13?
#3 Catch Up On The Missed Payment
If you can pay the missed installment quickly, do it.
Many times, the trustee won’t take action if the payment is caught up before your case falls too far behind. Even if it means cutting back on expenses or dipping into savings, catching up buys you peace of mind and keeps your plan running smoothly.
The faster you make it right, the more likely your case stays safe from dismissal.
#4 Communicate With The Chapter 13 Trustee
Trustees aren’t the enemy – they want repayment plans to succeed.
If you’re upfront about why you missed a payment, they may be more flexible than you think.
Staying silent, on the other hand, almost always makes things worse.
A quick phone call or a letter from your attorney explaining your situation can show the trustee that you’re taking your obligations seriously and not trying to abandon your plan.
#5 Request A Payment Plan Modification (If Needed)
Sometimes, a missed payment isn’t just a one-time fluke. Maybe you lost hours at work, faced unexpected medical bills, or had another major life change.
In those situations, your repayment plan may no longer be realistic.
Your attorney can file a request with the court to lower your payments or extend the repayment term.
Michigan courts will review your income and expenses, and if they see a genuine need, they may approve a modification that makes your payments affordable again.
What Happens If You Keep Missing Payments?
If missed payments pile up, the trustee will likely file a motion to dismiss your case. That means the court takes a hard look at your repayment plan and your payment history.
At this stage, you’re at real risk of losing all the protections that Chapter 13 gives you.
A dismissal puts you back at square one.
Creditors regain the right to call, sue, garnish, or repossess. If your home was safe from foreclosure because of the bankruptcy, that safety net disappears.
In Michigan, where foreclosures can move quickly, this is especially dangerous.
Repeated missed payments can also hurt your chances if you try to file again. Courts may look at your history and question your ability to stick to a new plan.
That doesn’t mean you’re out of options as sometimes converting to Chapter 7 is possible, but it does limit the flexibility you once had.
Bottom Line
If you miss a Chapter 13 payment in Michigan, your case is at risk of dismissal, but one payment usually won’t ruin everything if you act quickly.
The best move is to contact your attorney immediately, catch up on the missed amount if you can, and stay in touch with your trustee.
If your finances have changed, you may even be able to modify your repayment plan to keep the case alive.
A missed payment doesn’t end your bankruptcy, but ignoring it almost certainly will.