Missing a Chapter 13 Plan Payment: What Happens Next

What actually happens when you miss a trustee payment?

Nothing happens instantly. A Chapter 13 case is dismissed or converted only when a party in interest or the United States trustee asks the court and the court acts after notice and a hearing, for cause (11 U.S.C. § 1307(c)). Missed payments fall under two of the listed causes: failure to commence making timely payments under 11 U.S.C. § 1326, and material default by the debtor with respect to a term of a confirmed plan (11 U.S.C. § 1307(c)(4), (6)).

In practice, the Chapter 13 trustee usually notices the shortfall first. The trustee's statutory duties include ensuring that the debtor commences making timely payments under section 1326 (11 U.S.C. § 1302(b)(5)). Depending on the district, the next step is often a letter, a call to your attorney, or a motion to dismiss. Some local rules build in a response window: in the Eastern District of Missouri, for example, a debtor has 21 days from service to respond to a motion to dismiss a Chapter 13 case (E.D. Mo. L.R. 1017-1).

What changes the answer in your case?

Several facts move the outcome in different directions, and they are worth sorting out before you panic.

Timing matters most. Before confirmation, the concern is 11 U.S.C. § 1326(a)(1): payments are to commence not later than 30 days after the plan is filed or the order for relief, whichever is earlier, unless the court orders otherwise. After confirmation, the question becomes whether the miss is a material default with respect to a plan term (11 U.S.C. § 1307(c)(6)).

How far behind you are matters. One payment made up the following month is treated very differently from six months of arrears. Whether the shortfall is temporary or permanent matters too, because a permanent income drop usually points toward modification rather than catching up. And whether the court has already suspended or modified payments matters: some districts allow a motion for a moratorium on plan payments that states the length and the reasons (S.D.W. Va. LBR 3015-1.2).

• Pre-confirmation versus post-confirmation: different subsections of § 1307(c) apply.
• One month behind versus many months: materiality is a court determination.
• Temporary setback versus permanent income change: cure versus modify.
• Whether a motion is already on file and what your local response deadline is.

What does federal law say about Chapter 13 payments and default?

Three sections carry most of the weight.

11 U.S.C. § 1326(a)(1) sets when payments start: not later than 30 days after the date of the filing of the plan or the order for relief, whichever is earlier, unless the court orders otherwise. Section 1326(a)(2) directs the trustee to hold pre-confirmation payments until confirmation or denial, distribute them under the plan if it is confirmed, and return what is not yet due to creditors if it is not.

11 U.S.C. § 1307 is the dismissal-or-conversion section. Subsection (c) lets the court convert to Chapter 7 or dismiss, whichever is in the best interests of creditors and the estate, for cause, after notice and a hearing.

11 U.S.C. § 1322 is where curing lives on the plan side: a plan may provide for the curing or waiving of any default (§ 1322(b)(3)) and for curing a default within a reasonable time while maintaining payments (§ 1322(b)(5)).

Can you catch up or change the payment amount?

Those are two different requests, and the difference matters.

Catching up means paying the missed amounts so the plan is current again. Nothing in the Code forbids it, and trustees commonly accept a cure. But the mechanics are local: in the District of Massachusetts, payments to the Chapter 13 trustee must be made by certified check, money order, or an authorized electronic payment system, and must continue until the case is dismissed, the plan is completed, or the debtor moves for a hardship discharge, voluntary dismissal, or conversion (D. Mass. LBR Appendix 1, Rule 13-19).

Changing the amount means modifying the plan. After confirmation, plan terms generally change only through the court. In the Central District of California, a confirmed plan can be modified only by court order on a motion to modify or a stipulation with the trustee, and a motion to modify or to suspend plan payments must use court-mandated forms (C.D. Cal. LBR 3015-1). In the Eastern District of Missouri, a debtor seeking to amend a confirmed plan must do so by motion stating the reason and identifying every change (E.D. Mo. Local Rules of Bankruptcy Procedure).

Where do local rules and your trustee's practice differ?

This is the part that surprises people: the statute is national, the handling is not. Local bankruptcy rules and standing orders control how a default is raised, how quickly, and what you must file.

Wage orders are one example. In Hawaii and in the Northern Mariana Islands, the trustee may ask the court to issue an order directing your employer to pay the trustee directly if you fail to make timely plan payments (Bankr. D. Haw. LBR 3070-1; D. N. Mar. I. LBR 3070-1). In West Virginia's Southern District, a debtor makes payments directly to the trustee until employer wage withholding begins, and a returned check can trigger a cashier's-check-only requirement (S.D.W. Va. LBR 3015-1.2).

Pre-confirmation practice varies too. In the Western District of Oklahoma, debtors must be current in their payments at all future confirmation hearings or the case may be recommended for dismissal (W.D. Okla. LBR 7041-1).

What does a missed payment look like in practice?

A typical sequence looks like this. The payment does not arrive. The trustee's records show the shortfall. You, your attorney, or the trustee raises it, and a decision gets made about whether to cure, modify, convert, or dismiss.

Each of those has a statutory home. Curing a default can be built into the plan (11 U.S.C. § 1322(b)(3), (b)(5)). Converting to Chapter 7 is a right the debtor holds at any time, and any waiver of it is unenforceable (11 U.S.C. § 1307(a)). Requesting dismissal is also the debtor's right if the case has not previously been converted, and that waiver is unenforceable too (11 U.S.C. § 1307(b)).

One consequence people overlook: the codebtor stay in a Chapter 13 case ends as to a consumer debt if the case is closed, dismissed, or converted to Chapter 7 or 11 (11 U.S.C. § 1301(a)(2)). If a relative co-signed a loan, a dismissal can expose them again.

What documents and information are involved?

Gather these before you call anyone. You will move faster and the conversation will be more useful.

You want your case number, your confirmed plan, your trustee's payment history, and proof of any payment you believe was made. If income changed, you want documentation of the change, because a modification request generally has to explain it. Some districts require an amended budget or a signed statement that income and expenses have not changed when you move to amend a confirmed plan (E.D. Mo. Local Rules of Bankruptcy Procedure).

Keep tax obligations in view as well. In the Central District of California, for each year a case is pending after confirmation, the debtor must give the trustee copies of federal and state returns within 14 days after filing them, along with any extension request and W-2 and 1099 forms (C.D. Cal. LBR 3015-1). A payment problem and a document problem can arrive together, and both are listed grounds for trouble under 11 U.S.C. § 1307(c).

• Case number, confirmed plan, and the trustee's payment ledger.
• Proof of payments you believe were sent (check numbers, money orders, portal receipts).
• Documentation of any income or expense change.
• Any motion to dismiss already served on you, and the date you were served.

What should you ask a lawyer about a missed payment?

Bring specific questions. Bankruptcy court staff cannot give legal advice, including how to complete forms or which forms apply, and several courts say so in their own materials (Bankr. W.D. La. official page — CHAPTER 13 CASE TIMELINE).

Useful questions include: Is my case pre- or post-confirmation, and which part of 11 U.S.C. § 1307(c) applies to my situation? Has anything been filed against my case, and what is my deadline to respond under the local rule? Would curing the arrears or modifying the plan fit my situation better? What happens to my mortgage arrears, my car, and any co-signer if the case is dismissed or converted? Is a moratorium or suspension available in this district, and what does it require?

Also ask what the trustee's informal practice is. Local rules set the outer boundaries; trustee practice often determines whether a single miss becomes a motion.

Frequently asked questions

Will one missed Chapter 13 payment get my case dismissed?

Not by itself. A court may dismiss or convert a Chapter 13 case for cause, but only on request of a party in interest or the United States trustee and after notice and a hearing (11 U.S.C. § 1307(c)). Whether a miss is a material default with respect to a confirmed plan term is a determination the court makes on the facts of your case.

Can I make up missed Chapter 13 payments?

Debtors commonly cure a shortfall, and plans may provide for curing a default (11 U.S.C. § 1322(b)(3)) or curing within a reasonable time while maintaining payments (11 U.S.C. § 1322(b)(5)). The accepted form of payment and the timing are governed by local rules and trustee practice, so confirm both before sending funds.

What if my income dropped permanently?

That generally points toward modifying the plan rather than trying to catch up. After confirmation, plan terms are typically changed only by court order on a motion or by stipulation with the trustee, and some districts require an amended budget or a signed statement about income and expenses (C.D. Cal. LBR 3015-1; E.D. Mo. Local Rules of Bankruptcy Procedure).

Can I switch to Chapter 7 if I cannot keep up?

A debtor may convert a Chapter 13 case to Chapter 7 at any time, and any waiver of that right is unenforceable (11 U.S.C. § 1307(a)). Whether conversion is a good fit depends on your assets, income, and goals. Note that the codebtor stay ends as to a consumer debt when a case is converted to Chapter 7 or 11 (11 U.S.C. § 1301(a)(2)).

Does the trustee have to warn me before asking for dismissal?

Practice varies by district and trustee. The Code requires notice and a hearing before the court dismisses or converts for cause (11 U.S.C. § 1307(c)), and some local rules set a response window — in the Eastern District of Missouri, 21 days from service of a motion to dismiss a Chapter 13 case (E.D. Mo. L.R. 1017-1).

Can the court order payments taken from my paycheck instead?

Some districts allow it. In Hawaii and the Northern Mariana Islands, a debtor may request a wage order directing an employer to pay the trustee, and the trustee may request one if the debtor fails to make timely plan payments (Bankr. D. Haw. LBR 3070-1; D. N. Mar. I. LBR 3070-1). Availability and procedure depend on your district.

What does it cost to file a Chapter 13 case?

The statutory filing fee for an individual or joint Chapter 13 case is $235 (28 U.S.C. § 1930(a)(1)(B)), plus a $78 administrative fee (Bankruptcy Court Miscellaneous Fee Schedule, Item 8, effective December 1, 2023). Nonpayment of fees required under chapter 123 of title 28 is separately listed as cause for dismissal or conversion (11 U.S.C. § 1307(c)(2)).

Sources

• 11 U.S.C. § 1307 — Conversion or dismissal · official source
• 11 U.S.C. § 1326 — Payments · official source
• 11 U.S.C. § 1322 — Contents of plan · official source
• 11 U.S.C. § 1302 — Trustee · official source
• 11 U.S.C. § 1301 — Stay of action against codebtor · official source
• E.D. Mo. L.R. 1017-1 — Motions to Dismiss
• E.D. Mo. Local Rules of Bankruptcy Procedure (effective December 1, 2024)
• C.D. Cal. LBR 3015-1 — Procedures Regarding Chapter 13 Cases
• S.D.W. Va. LBR 3015-1.2 — Chapter 13 Plan Payments to Trustee
• D. Mass. LBR Appendix 1, Rule 13-19
• Bankr. D. Haw. LBR 3070-1 — Chapter 13 – Payments
• D. N. Mar. I. LBR 3070-1 — Chapter 13 – Payments
• W.D. Okla. LBR 7041-1
• Bankr. W.D. La. official page — CHAPTER 13 CASE TIMELINE
• 28 U.S.C. § 1930(a)(1)(B)
• Bankruptcy Court Miscellaneous Fee Schedule, Item 8

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