I always tell my clients when we discuss their Chapter 13 plans, five years is a long time. In the interim, life happens - cars break down, people lose their jobs or get sick, adjustable rate mortgages, well, adjust, usually upwards. And sometimes clients find themselves unable to meet their monthly Chapter 13 payment to the Trustee.
However, as often as not, clients don't let me know they're experiencing difficulty and just miss payment after payment on their plan. Inevitably, I receive a Motion to Dismiss their case for failure to make plan payments, with a copy sent to the client. Then I receive a call from the client for help.
Often times, I can file what is know as a Motion to Modify your plan. What this motion can do is waive and cure any missed Trustee payments, so you start fresh with the next payment, and resolves the Trustee's motion to dismiss your case. Of course, the ability to do this varies from client to client and their own unique financial situation and plan. In addition, sometimes payments can be lowered, due to changes in the debtor's financial situation after filing for bankruptcy protection or merely a reallocation of the monthly payment over time.
Another option is for the client to simply work out a payment arrangement to catch up with the Trustee directly. In the Northern District of New York where I practice, the Trustee's office is very accommodating and willing to work with debtors to restore their good standing on their account. I do, however, caution debtors that they should still call their attorney and keep the attorney in the loop with what is going on, particularly if they set out to call the Trustee directly and work out catch-up arrangements.
Finally, you may be able to convert your case from a Chapter 13 to a Chapter 7, depending on the particulars of your case.
It's not necessarily the end of the world if you fall behind on Trustee payments. But always let your attorney know your financial situation and if you're having trouble or missed Trustee payments before the Trustee makes his/her motion.
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