When you file for Chapter 13 bankruptcy, you know that you will be repaying some or all of your debt over the course of three to five years. While this sounds easy enough upfront, things can get more difficult along the way.
Have you fallen behind? Are you worried that you are unable to make your next Chapter 13 plan payment? If you answered yes to either question, you must know what to do next.
In this situation, your trustee will likely request that the court dismiss your case. Since you don’t want this to happen, you should consider all other options. There are things you can do to stay on track.
- Get up to date with your payments. If you ran into temporary trouble, let your trustee know what is going on. Once you straighten things out, you may be able to catch up.
- Modify your plan. If you are facing a long term financial emergency, such as a job loss, you can request that the court modifies your repayment plan. For the court to agree, you must propose a new payment amount that you are comfortable making at the present time. You should also be ready to show how and why your financial situation changed. The more proof you have the better off you will be.
- Opt for a hardship discharge. With this, a discharge is granted despite the fact that you did not complete the entire length of your repayment plan. This can only be granted after the court reviews your finances.
Note: a hardship discharge does not impact priority debts, such as child support obligations or tax debt.
There is nothing worse than thinking you are on the right track with a Chapter 13 bankruptcy repayment plan, just to find that something has gone wrong. If you are unable to make payments as required by the court, contact us to discuss your case. We can help you better understand your options, including the finer details of the three strategies above.