Critical Mistakes to Avoid During a Chapter 13 Repayment Plan
April 8, 2026
Financial hardship can feel overwhelming, especially when you’re doing everything you can to get back on track. Filing for Chapter 13 bankruptcy is often a meaningful step toward regaining control, allowing you to reorganize your debts and create a manageable repayment plan. However, even with a structured path forward, you might feel uncertain about what comes next or worry about making a mistake that could jeopardize your progress.
At Swindell & Associates, PC, we work closely with clients committed to rebuilding their financial stability through Chapter 13. We help clients avoid common pitfalls and stay focused on their long-term goals. From our Amarillo, Texas, office, we serve clients across the Texas Panhandle, including Borger, Pampa, Hereford, and Dumas. If you’re considering Chapter 13 or are already in a repayment plan, reach out to us to discuss how we can help you stay on track.
Failing to Stick to the Repayment Plan
One of the most significant mistakes people make in a Chapter 13 case is failing to consistently follow the court-approved repayment plan. Your plan is designed based on your income, expenses, and debts, and it requires regular payments over three to five years. Missing payments or falling behind can put your entire case at risk.
Even one missed payment can create complications. If the issue isn’t addressed quickly, the court may dismiss your case, which could leave you exposed to creditor actions like foreclosure or wage garnishment. Life happens—unexpected expenses, job changes, or medical emergencies can all affect your ability to pay—but ignoring the problem only makes it worse.
If you anticipate difficulty making a payment, it’s important to act quickly. You may be able to request a modification to your plan or explore other options. Working with an experienced bankruptcy lawyer can help you address these issues before they escalate.
Taking on New Debt Without Approval
Chapter 13 is designed to help you repay existing debts, not take on new ones. Another common mistake is incurring additional debt during the repayment period without court approval. This can include anything from opening new credit cards to financing a car or taking out a personal loan.
Before making any major financial decisions, it’s critical to understand the restrictions placed on you during Chapter 13.
Unauthorized credit use: Taking on new credit without permission from the trustee or court can violate your repayment agreement and may lead to dismissal of your case.
Impact on repayment ability: Taking on new debt can hinder your ability to meet monthly plan payments, making it more challenging to successfully complete the program.
Creditor objections: Creditors may challenge your actions if they believe new debt is inappropriate or unnecessary.
Staying disciplined with your finances is key during this time. If you believe new debt is unavoidable, discuss it with your attorney first so you can take the proper steps and avoid unnecessary setbacks.
Not Reporting Changes in Income or Expenses
Your Chapter 13 repayment plan is based on your financial situation at the time of filing. However, life doesn’t stay the same for three to five years. Changes in income, employment, or household expenses are common, but failing to report these changes can create serious issues.
The court and trustee expect transparency throughout the process. If your income increases, your payment amount may need to be adjusted. If your income decreases, you may qualify for a modified plan—but only if you report the change.
Some changes that should always be reported include:
Job changes: Starting a new job, losing a job, or experiencing a change in income can all affect your repayment obligations.
Unexpected expenses: Major medical bills, necessary home repairs, or other significant costs should be disclosed.
Changes in household size: Adding or losing a dependent can impact your financial situation and your plan terms.
Ignoring these changes can lead to allegations that you’re not complying with the terms of your Chapter 13 plan. On the other hand, being proactive can help you maintain your case and adjust your plan when necessary.
Overlooking Required Documentation and Deadlines
Chapter 13 involves ongoing responsibilities beyond making monthly payments. Many people underestimate the importance of staying organized and meeting all documentation requirements and deadlines throughout the process.
Missing paperwork or deadlines can delay your case or even lead to dismissal. It’s important to stay on top of all requirements from start to finish.
Tax return submissions: You’re typically required to provide annual tax returns to your trustee. Failing to do so can cause complications.
Court notices and correspondence: Ignoring court or trustee correspondence can result in missed deadlines or misunderstandings about your obligations.
Payment records: Keeping track of your payments helps you verify that you’re meeting your responsibilities and can be useful if disputes arise.
Staying organized may feel tedious, but it’s a critical part of successfully completing your Chapter 13 plan. Regular communication with your attorney can also help you stay informed and avoid unnecessary errors.
Assuming Chapter 13 Will Solve Everything Automatically
While Chapter 13 can provide meaningful relief, it’s not a one-size-fits-all solution or a quick fix. Some individuals mistakenly believe that filing automatically resolves all financial issues without requiring ongoing effort or attention.
Chapter 13 works best when you actively participate in the process and remain committed to your financial goals. It requires discipline, communication, and a willingness to make adjustments along the way.
Ongoing financial habits: Continuing to overspend or failing to budget can undermine your progress during the repayment period.
Misunderstanding debt coverage: Not all debts may be treated the same under Chapter 13, and some obligations may continue after your plan ends.
Lack of communication: Failing to stay in touch with your attorney or trustee can lead to missed opportunities to resolve issues early.
By staying engaged and informed, you can make the most of the protections and structure that Chapter 13 provides. Working with a knowledgeable legal professional helps you stay focused and avoid preventable missteps.
Moving Forward With Confidence During Chapter 13
At Swindell & Associates, PC, we’re committed to helping our clients make informed decisions throughout their Chapter 13 journey. From our Amarillo, Texas office, we assist clients across the Texas Panhandle, including Borger, Pampa, Hereford, and Dumas, Texas, with practical guidance and steady support. If you’re ready to take the next step or need help staying on track, reach out to our firm today to discuss your options.