If you have filed for Chapter 13 bankruptcy, you are required to make monthly payments. But what happens if you find yourself unable to make these payments? This scenario is indeed daunting, but understanding your options can provide clarity. If you are considering filing for bankruptcy, contact Winterbotham Parham Teeple, a PC at 800.400.9000 for a free consultation with a bankruptcy attorney in Hesperia, CA.

Is This a Temporary Situation?

When facing difficulties in making your Chapter 13 payments, the first question to ask is whether the issue is temporary. Temporary cash-flow problems can sometimes be managed more easily. The CARES Act legislation allows for Chapter 13 plans to be extended to seven years instead of the usual five. Some trustees are offering informal payment suspensions or catch-up plans, while others might require a formal plan modification. If your financial troubles are temporary, you might have a chance to salvage your bankruptcy plan.

Flexibility Based on Plan Approval Criteria

The flexibility of adjusting your Chapter 13 payment plan depends largely on how the original amount was calculated. If your plan is income-driven, and your income changes, modifying the plan is usually straightforward. However, if the plan is based on the value of non-exempt assets, creditors will still need to receive the originally calculated amount. While you may modify the payments, the total required payment amount remains the same.

Options for Modifying Chapter 13 Plans

If your financial situation is permanent, there are still several options to consider. You might propose a modified plan based on your current income. Alternatively, you could convert your bankruptcy from Chapter 13 to Chapter 7. Another option is to request a dismissal of your case, which allows you to start a new case with different timelines and values. In some specific circumstances, you might be eligible for a hardship discharge, which grants the benefits of a discharge without completing the payment plan.

Seeking Professional Guidance

Facing financial hardship and being unable to make your Chapter 13 payments is a challenging scenario, but it doesn’t mean you are out of options. It’s crucial to consult with an experienced bankruptcy attorney who can guide you through the process and help you determine the best course of action. Reach out to Winterbotham Parham Teeple, a PC at 800.400.9000 for expert advice and a free consultation.

Contact a Bankruptcy Attorney in Hesperia, CA Today

Filing for Chapter 13 bankruptcy can provide a structured path to managing your debts, but unforeseen financial difficulties can disrupt your payment plan. Understanding your options, whether it’s a temporary or permanent issue, can make a significant difference in navigating this challenging time. By consulting with a bankruptcy attorney in Hesperia, CA, you can explore various solutions to keep your financial recovery on track. Contact Winterbotham Parham Teeple, a PC at 800.400.9000 to discuss your situation and find the best way forward.