Chapter 13 missed payments do not end your case automatically, but they start a clock. After a missed payment or two, the trustee will usually file a motion to dismiss. You can often stop it by catching up, agreeing to a cure schedule, or modifying the plan, as long as you act before the hearing rather than after it.
How Chapter 13 missed payments turn into a motion to dismiss
Every plan payment is part of a court order. The standing trustee's office tracks each one, and when an account falls behind, it follows a fairly predictable path.
Step 1: The account shows a default
Trustees differ, but many will not file anything over a single late payment that is made up quickly. Once you are a couple of payments behind, a motion becomes much more likely.
Step 2: The trustee files a motion to dismiss
The motion, served on you and your attorney, states how much you are behind and sets a deadline to respond or a hearing date. Read it the day it arrives. The amount due often includes the payment that came due after the motion was prepared.
Step 3: Response, cure or hearing
Your attorney can oppose the motion, show that the default has been cured, or propose an agreed resolution. If nothing is done, the court may dismiss the case, which ends the automatic stay and leaves your debts in place.
If you have already missed a payment or know you are about to, call (415) 754-0115 now to schedule a free consultation, or use our contact page. The earlier the problem is raised, the more ways there are to solve it.
Ways to cure a default
The right fix depends on why payments stopped and whether the cause is temporary or permanent.
Pay the arrears in a lump sum
If money is available from a tax refund, a bonus or help from family, paying the full amount before the hearing is the cleanest cure. Get proof that the trustee received it and applied it correctly.
Agree to a catch-up schedule
Many trustees will accept a stipulation in which you pay the regular amount plus an additional portion each month until the arrears are gone. These agreements often include a "drop-dead" provision: if you miss another payment, the trustee can ask for dismissal without a new hearing. Treat those terms seriously.
Modify the plan
Under section 1329, a confirmed plan can be modified after confirmation to reduce the payment, move the missed amounts to the end of the plan, or change what unsecured creditors receive. A modification has to meet the same legal requirements as the original plan, and it generally cannot extend the plan beyond five years from the first payment.
When a modification makes sense
Modification tends to fit when income has changed for the foreseeable future, for example a new job at lower pay, a divorce, or a new dependent. Recent pay stubs and an updated budget show the court the new payment is realistic.
Set up a wage order
If payments were missed because they were being made by hand, a payroll deduction that sends the plan payment directly from your employer to the trustee can prevent a repeat.
Missed mortgage payments are a separate problem
Many California plans have the homeowner pay the ongoing mortgage directly to the lender, while the trustee handles only the arrears from before filing. Missing those direct payments does not show up on the trustee's ledger at first, but the lender can file a motion for relief from the automatic stay, which could allow foreclosure to proceed.
Lenders frequently resolve those motions with an agreed order that sets a cure schedule and allows quick relief if you miss again. Our guide on how to save your home from foreclosure covers other tools for protecting the house.
When catching up is not realistic
If the change is permanent and a modification cannot make the plan affordable, other options may be on the table:
- Converting to Chapter 7 if you qualify, which may discharge remaining unsecured debts more quickly.
- A hardship discharge under section 1328(b), available only in narrow circumstances beyond your control.
- Voluntary dismissal, which ends the case without a discharge and carries consequences if you refile within a year.
Each option affects your house, car and other property differently, so they are worth comparing side by side before choosing.
One practical point: keep paying whatever you can while the options are being sorted out. A partial payment does not cure the default, but a record of steady effort helps when you ask the trustee for a stipulation or the judge for a modification. Stopping payments entirely while you decide usually makes every one of these paths harder, and it can turn a manageable shortfall into a larger one.
Plan trouble? How The Somal Law Firm helps
Attorney Bob Somal represents Chapter 13 filers in Pleasanton, Dublin, Livermore, San Ramon, Danville and across Alameda and Contra Costa Counties. As part of our bankruptcy and foreclosure defense practice, we review the trustee's ledger against your payment records, respond to motions to dismiss, negotiate cure agreements and prepare plan modifications. For a refresher on how the payment was set in the first place, see our Chapter 13 repayment plan guide.
What to have ready for that first call: the trustee's motion or notice, your latest payment history from the trustee's online portal, recent pay stubs, and a short explanation of what caused the shortfall.
Frequently asked questions
Is there a grace period for Chapter 13 payments?
There is no formal grace period in the Bankruptcy Code. Trustees have their own practices on when to file a motion, so do not rely on informal leniency.
Can I skip a payment if I tell the trustee in advance?
Not on your own. A suspension or change requires an agreement or court approval, usually handled through your attorney.
Will missed payments hurt my chance of refiling later?
A dismissal for missed payments can shorten the automatic stay in a new case filed within a year, and the court may presume the new case lacks good faith unless you show your circumstances have changed.
Falling behind is common, and it is often fixable if you move quickly. Call (415) 754-0115 or use the contact page to set up a free consultation. Bring any notice from the trustee, and we will explain your options and the deadline you are working against.
Attorney Advertising. This article is general legal information for Bay Area residents, not legal advice, and does not create an attorney–client relationship. Every situation is different — please consult a licensed attorney about your specific circumstances.