I’m Falling Behind on My Chapter 13 Payments. Here’s What to Do Right Now.

Written by Steve Rhode, consumer debt expert since 1994 • Last updated August 10, 2026

What Just Happened to Your Chapter 13 Case

You missed a payment, or several, and now you’re worried the trustee is about to pull the plug. Here’s what’s actually happening behind the scenes: your trustee — the person the court appointed to collect and distribute your plan payments — is required to flag a shortfall. Depending on your district, that can mean an informal letter, a formal notice, or, if it goes far enough, a motion to dismiss for “material default by the debtor with respect to a term of a confirmed plan” under 11 U.S.C. §1307(c)(6).

Nothing about that motion is automatic. A judge has to grant it, after notice and a hearing, and you — or your attorney — get a chance to respond before it happens. But read that phrase carefully, because it does not mean what most people assume. “After notice and a hearing” is a defined term in 11 U.S.C. §102(1), and it guarantees you an opportunity for a hearing, not an actual one — §102(1)(B)(i) lets the court act with no hearing at all if nobody requests one in time. So the deadline printed on the paperwork you were mailed is the thing that matters. Miss it and your case can be dismissed without you ever standing in front of a judge. That gap between “I’m behind” and “my case is dismissed” is where you have the most power to act, and it’s the part almost nobody explains to you.

One thing that can turn a wobble into that exact kind of default: taking out new debt — like a title loan — without asking first. Here’s what most trustees require before you sign anything new.

Your Options Right Now

How to Actually Stop It — Your 4 Paths

• Modify the plan (fastest, keeps your case alive). A modification under §1329 can lower the payment or stretch it out — but a modified plan generally can’t run past the applicable commitment period unless the court, for cause, approves a longer period, and it can never exceed five years total.
• Request a hardship discharge. Under §1328(b), the court can discharge you without finishing payments — but only if all three conditions hold. Two things it does not do, and both matter: §1328(c) excepts debts of a kind listed in §523(a), and it also excepts long-term debts your plan was curing and maintaining under §1322(b)(5) — which for most people means the mortgage. A hardship discharge does not save the house. If your plan was catching up arrears, that debt survives intact and the lender can pick up where it left off.
• Convert to Chapter 7. Your right under §1307(a) — no permission from the trustee or your creditors required. Check one thing first, because converting into a dead end is a real risk: you still have to qualify for a Chapter 7 discharge. There are two lookback bars. Under §727(a)(8) you cannot get a Chapter 7 discharge if you already received one in a Chapter 7 or Chapter 11 case filed within the previous eight years. Under §727(a)(9), a prior Chapter 13 discharge from a case commenced within the previous six years blocks it too — but not always: that bar lifts if your payments under the earlier plan came to 100% of allowed unsecured claims, or to 70% under a plan you proposed in good faith that represented your best effort. Because §348(a) says conversion does not change your filing date, both of those clocks run from the day you filed this case, not from the day you convert. Read the complete Chapter 7 guide before you decide.
• What WON’T work: going quiet. Not answering the trustee’s calls, not showing up to the hearing, or hoping the case just disappears. It doesn’t disappear — it gets dismissed under §1307(c), and everything you were protected from comes right back.

What You Need to Know About Where Chapter 13 Cases Actually End Up

Those FY2025 numbers — roughly 180,000 Chapter 13 case exits reported in the U.S. Trustee Program’s FY2025 audited annual trustee reports, 52.1% dismissed, 42.6% completed/discharged, 5.3% converted — are exits recorded in one fiscal year across many different filing cohorts, not a single group of people tracked start to finish, and in that year dismissals outnumbered completions. If you’re behind right now, you’re in the majority of people who ever struggle with a Chapter 13 plan, not some rare failure.

If your Chapter 13 runs your mortgage through the trustee (a “conduit” plan), your monthly payment can look dramatically different from someone else’s with the exact same debt — the trustee’s percentage fee is charged on that mortgage money too, and the fee rate varies by district. See the complete guide to Chapter 13 and your mortgage for how that plays out.

If your case is dismissed and your mortgage servicer restarts foreclosure, file a complaint with the CFPB if the servicer isn’t following its own loss-mitigation rules, and check your state attorney general’s office for state-specific protections. If you need legal help but can’t afford an attorney, find free legal aid through LSC.gov. The CFPB’s page on what to do if you can’t pay your mortgage explains your servicer’s obligations even outside bankruptcy.

Frequently Asked Questions

I missed a Chapter 13 payment — is my case automatically dismissed?

No. Dismissal for “material default” under 11 U.S.C. §1307(c)(6) requires the trustee or a creditor to file a motion, and the court to grant it after notice and a hearing. You get a chance to respond — often by proposing a plan modification — before that happens.

Can I lower my Chapter 13 payment without losing my case?

Usually yes. Under 11 U.S.C. §1329, you, the trustee, or an unsecured creditor can ask the court to modify your confirmed plan — increasing or reducing payments, or extending the time to pay — at any time before you finish. A modified plan generally can’t run past five years total.

What is a Chapter 13 hardship discharge and do I qualify?

Under 11 U.S.C. §1328(b), a court can discharge you without finishing your payments only if all three things are true: your failure to pay is due to circumstances you shouldn’t be justly held accountable for, your unsecured creditors already received at least what they’d have gotten in a Chapter 7 liquidation, and modifying the plan isn’t practical. It does not discharge debts that were never dischargeable to begin with.

Should I convert my Chapter 13 to a Chapter 7?

It’s worth asking your attorney. Under 11 U.S.C. §1307(a), converting is your right — the trustee and creditors can’t stop you. Some courts have denied conversion in extreme, clearly bad-faith cases, but that is an unsettled question that varies by circuit rather than a routine outcome. It tends to make the most sense when you can’t sustain any realistic Chapter 13 payment and most of your debt is the kind Chapter 7 can wipe out. Read real conversion stories before you decide, and my complete Chapter 7 guide for what changes.

My case was dismissed — can my mortgage company foreclose right away?

The automatic stay ends the moment the case is dismissed under 11 U.S.C. §362(c)(2)(B) — there’s no grace period. A servicer can pick a foreclosure up right where it left off. And it is not only your own creditors: if anyone co-signed a debt with you, the co-debtor protection in §1301 ends at the very same moment — §1301(a)(2) names dismissal in its own text — so a collector can start calling your mother, your ex, or whoever signed alongside you the same day. That’s exactly why acting before dismissal, not after, matters so much.

If my case is dismissed, how fast does refiling protect me again?

It depends on your filing history. If you had one case dismissed in the past year, refiling only gives you 30 days of automatic stay protection unless the court extends it, and the law presumes bad faith in specific situations — like a case dismissed for missed plan payments with no real change in your finances since. If you’ve had two or more cases dismissed in the past year, the stay doesn’t take effect at all unless a judge orders otherwise. There is also a harder bar that stops you refiling at all: under §109(g) you cannot be a debtor for 180 days if your case was dismissed because you willfully failed to obey a court order or to appear, or if you asked for the dismissal yourself after a creditor had moved for relief from the stay. That one is not automatic on every dismissal — a plain missed payment does not trigger it — but it is exactly the trap that closes on people who stopped answering the court. Talk to an attorney about this before you refile, not after.

What happens to the money I already paid into my Chapter 13 plan if it’s dismissed?

Whatever the trustee is holding that hasn’t been distributed to creditors yet is generally returned to you, minus fees already earned. Money already disbursed to your creditors stays paid — it isn’t clawed back to you. Ask your trustee’s office for your case-specific accounting.

Why is my Chapter 13 payment so much higher than someone else’s with similar debt?

Geography, mostly. Where your mortgage runs through the trustee as part of the plan — a majority of trustees nationwide handle it this way — the trustee’s percentage fee gets charged on that mortgage money too, and the fee rate is set district by district under 28 U.S.C. §586(e)(1)(B), up to a 10% cap. Two people with identical debts in different courts can end up with payments that differ by thousands of dollars a month.

One more thing — everything I share here is based on 30 years of helping people through exactly this. But my advice is input for your decision, not the decision itself. Only you know your full situation. Talk to an attorney, look at your numbers, and make the choice that serves your future.