You may have successfully filed for Chapter 13 bankruptcy and have come up with a repayment plan to handle your outstanding debts. But what if a sudden change in your life makes it difficult or even impossible to fulfill your plan? You may fear that a court will dismiss your bankruptcy case. Fortunately, there are some options that may assist you.
You may become ill or get into an auto accident and cannot work while you recover. This means you cannot make your Chapter 13 payments due to a drop in your income. As Bankrate explains, you might be able to persuade a bankruptcy court to lower your payments while you regain your health.
Amend your plan
A bankruptcy court may not have confirmed your repayment plan yet. If this is the case, you can file an amendment to change the repayment amounts in your plan. You should explain how your ability to pay your initial plan has changed and supported your claim with financial documents. Your amendment will require approval from your bankruptcy trustee and your creditors before a court can make the final decision on your amendment.
File a motion
If a court has already approved your plan, you may file a motion with your bankruptcy court requesting a reduction in your payments. This motion should involve an explanation of why you want to change your payment plan and evidence supporting your claim that you cannot make payments according to your initial plan. If the court agrees with your arguments, the court will change your repayment plan as you have requested.
Stay in contact with your trustee
If you anticipate that a recent accident or injury will cause you to miss a payment, discuss it with your bankruptcy trustee as soon as possible. Your trustee might be able to give you additional time to catch up on a missed payment. Once you have a good idea of when you can get back to work, you may decide to pursue one of the aforementioned options.
