Filing for bankruptcy is a stressful process that directly impacts the lives of those who file. When you file for chapter 13 bankruptcy, you state that you, using your regular income, will follow a plan to repay all or a part of your debts over three to five years. Chapter 13 bankruptcy filings are particularly attractive because filers may save their homes from foreclosure.
Filers are required to follow a chapter 13 repayment plan. By failing to remain up-to-date on your repayment plan, you run the risk of having your bankruptcy case dismissed by a trustee or creditor. Options exist for you to avoid negative consequences should you become aware that you will be unable to make a chapter 13 payment.
Work With Your Bankruptcy Trustee
You will be assigned a bankruptcy trustee in a chapter 13 bankruptcy case. The trustee will collect your timely payments and distribute them to the appropriate creditors. Since your bankruptcy works as an intermediary between you and your creditors, it is advisable to inform your trustee that you will be unable to make a payment. The trustee may work with you in an informal capacity, especially if the reason for your missed payment is temporary or the result of an unforeseen financial emergency, such as the unexpected loss of a job. By informing their trustees, debtors may avoid the dismissal of their case, and debtors may be able to get caught up over the course of the following months.
Consider Modifying Your Repayment Plan
Chapter 13 repayment plans may be modified. It is not always possible to follow a repayment plan as originally designed. Modifying a repayment plan may provide relief for debtors facing a sudden financial emergency such as a loss of employment. A debtor can petition the bankruptcy court to modify his or her repayment plan. The petition must delineate the change in circumstances requiring the modification as well as those specific changes the debtor wishes to make. The court will review the petition, applying the appropriate tests to determine whether a modification is appropriate.
Obtain a Hardship Discharge
Eligible debtors may receive a hardship discharge. In the event that a hardship discharge is granted, a debtor shall be relieved of his or her remaining payments. A court determines whether a hardship discharge is appropriate after reviewing the debtor’s financial situation and analyzing the best interests of the parties. It is important to note that certain debts may not be discharged, and you should speak with an experienced attorney who can better explain the effect of your hardship discharge.
Perhaps bankruptcy isn’t right for you. Although filing for chapter 13 bankruptcy can provide financial relief and stability, your inability to continue making required payments may provide you with no benefit. Thus, debtors may consider dismissing their bankruptcy case and refiling.
Contact Us Today to Speak with a St. Petersburg Bankruptcy Attorney
Alternatives exist should you be unable to make your chapter 13 payment. However, you should avoid navigating the complex options available alone. Our skilled and experienced bankruptcy attorneys at Berkowitz & Myer are committed to providing you with the legal counsel you require when faced with the complexities of chapter 13 bankruptcy. Schedule your initial consultation by calling us at (727) 344-0123 or by contacting us through our online contact form.