If your financial situation changes and you can’t afford Chapter 13 Bankruptcy payments, then you’ll be worried that your case will be dismissed, and that you’ll still have your debts, and are not able to afford to pay them back.
Fortunately, help is at hand, and you’ll soon be able to decide on the best course of action.
The most important thing is that you don’t delay the problem won’t go away or resolve itself.
Short term issue
A short terms inability to meet your Chapter 13 Bankruptcy payments is usually caused by an emergency, such as an unexpected bill or a temporary reduction in working hours.
You will need to talk to the court and explain your situation. The court will often give you more time to catch up and pay off your default, so that you can get back on track again.
Long term issue
A long term inability to pay your Chapter 13 Bankruptcy payments is usually caused by an event such as job loss, serious or permanent injury or disability.
This may mean that you are unable to work and so can’t generate the income needed to pay your Chapter 13 Bankruptcy payments.
One option available to you is to modify your Chapter 13 Bankruptcy payments, by proposing a new payment amount that you will be able to afford.
Another option is to see if you qualify for a Hardship Discharge.
The court will analyze your situation and decide whether it is the best interests of all concerned to discharge your case. You will still need to pay your priority debts such as certain taxes, and child support.
Your bankruptcy attorney will be able to explain more about Hardship Discharge.
Convert to Chapter 7
Depending on your circumstances and income, you may be able to convert your Chapter 13 Bankruptcy to Chapter 7 Bankruptcy.
You will have a new trustee, and have to prove that you qualify for Chapter 7.
Your bankruptcy attorney will be able to explain more about this, and again it won’t dismiss priority debts.
Dismiss and refile
You might want to get your case dismissed and refile if you are still struggling, or can’t convert to a Chapter 7 Bankruptcy.
When your financial situation improves, you can then file for Chapter 13 Bankruptcy again.
You’ll also need to ask the court to extend the automatic stay in any subsequent bankruptcies. This will stop creditors from contacting you at all.
If your creditors ignore the automatic stay they are likely to be in contempt of court.
Whatever your situation, if you’re worried because you can’t afford Chapter 13 Bankruptcy payments, you need help and advice now.