Vernon Hills Bankruptcy Lawyer States The Reasons Why Chapter 13 Cas...

Chapter 13 bankruptcy cases fail for a number of reasons.  The biggest failure is due to missed trustee payments.   As you are aware, debtors have to make the trustee payment.    If they lose their job for some reason, it can cause a default to accrue and eventually the trustee will bring a Motion to Dismiss the case.  This is because debtors are not satisfying the trustee and are not complying with the terms of the plan and are not paying creditors.

The other thing that debtors will voluntarily dismiss the case.  Maybe it’s too much for them.  They can’t handle it.  Or, the money is coming out of their check for the trustee and they are falling behind on their regular mortgage payment.  Remember, they have to make that separate mortgage payment.  So the mortgage company basically comes in and says we want to modify the automatic stay meaning remove the bankruptcy protection against us because our client, the homeowner, is not making the regular mortgage payment outside of the plan.  And that type of motion would be routinely granted in most instances.  So the debtors need to be perfect.  They need to make all of the trustee payments and they need to make all of the regular mortgage payments outside of the plan once again.  That’s tough to do over a period of 3-5 years. 

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