Not being able to make your Chapter 13 plan payments can be distressing. What options do you have? Is there anything you can do to help get you over this hurdle without jeopardizing your payment plan? It’s possible that if you get behind on your payments, your trustee or creditor could request a dismissal of your bankruptcy case.

Chapter 13 Bankruptcy Repayment Tips

Here are few things you can do to prevent a dismissal of your Chapter 13 bankruptcy case.

Contact Your Trustee or Bankruptcy Lawyer

As soon as you realize you can’t make your bankruptcy payment, contact your trustee or bankruptcy lawyer to let him know you are going to miss a payment. You can also make a reduced payment to show a good faith effort.

Temporary Fixes

couple struggling to make bankruptcy paymentsIf your situation was caused by a temporary financial emergency, it is possible that your trustee will allow you to get caught up over the next few months. Or, your trustee might request that you ask the court for a suspension of your payments. In most cases, you can explain your situation and the courts will give you some additional time to get caught up.

Have Your Plan Modified

If you’ve had a change in your financial situation and can no longer afford to make the payments, you will need to petition the courts for a plan modification to reduce the amount of your payments.

Extend the Terms of Your Plan

In some cases, you might be able to have the length of your plan extended.

Request a Hardship Discharge

If needed, you can request a hardship discharge due to a change in your circumstances. This will release you from repaying certain debts. In order to qualify for a hardship discharge, you must:

  • Prove your inability to repay due to circumstances beyond your control
  • You will have to allow your trustee to sell your non-exempt property to repay your creditors what they would have been owed had you filed a Chapter 7 bankruptcy
  • Show that the modification of your plan is not a possibility

Convert Your Bankruptcy to a Chapter 7

If you want to convert your bankruptcy to a Chapter 7, you will have to show proof that you qualify because you can no longer afford your Chapter 13. Then you will be assigned a new trustee.

Allow Your Case to Be Dismissed

You can allow your case to be dismissed then refile for another Chapter 13 bankruptcy after your situation improves. However, you should talk with your bankruptcy attorney before doing so as there might be other issues that have to be addressed as well.

If you are falling behind on your Chapter 13 payment plan, please contact Clark & Washington and let us help you take back control of your financial future.