Bankruptcy Courts Have Discretion to Allow Chapter 13 Debtors to Make a Curative Payment After Expiration of the Plan Duration Says District Court

Bankruptcy Courts Have Discretion to Allow Chapter 13 Debtors to Make a Curative Payment After Expiration of the Plan Duration Says District Court

On June 25, 2019 the District Court for the Eastern District of Michigan reversed and remanded a decision by the Bankruptcy Court about late plan payments.

The Debtors were in a 60 month plan which provided for monthly payments and payment of their 2017 tax refund. At the expiration of the 60 month plan, the Debtors had not paid the refund to the Trustee. The Trustee filed a motion to dismiss and shortly thereafter the Debtors submitted their refund to the Trustee. The Debtors asked the Court to deny the motion to dismiss arguing the Bankruptcy Court had discretion to allow them to cure the default.

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