No one plans on dramatic financial changes, but they happen. When
changes do arise to an individual in Chapter 13 bankruptcy, they might
be misled into believing there is no other option than sticking to their
schedule of set monthly payments. But they might be surprised to find
that Chapter 13 bankruptcy has a great deal of flexibility. Before we
discuss options, it is important to note that payments are not something
you want to ignore. You must make all of your Chapter 13 payments in
full and on time because if you do happen to miss a payment, the trustee
in charge of your case may drop or dismiss your case. Were that to
happen, the court cannot protect your property from creditors. However,
if you decide that you no longer want to make payments on your Chapter
13 bankruptcy, you do have options.
For starters, you can convert the Chapter 13
bankruptcy into Chapter 7. If they do convert the case, the debtor no
longer has to make Chapter 13 payments. An example where this might be a
good option is if a person filed for Chapter 13 for a very specific
reason, such as trying to catch up on a car loan or home mortgage to
prevent a loss from foreclosure. However, if the debtor still cannot
keep up with payments in Chapter 13, it wouldn’t make sense to make
payments any longer, and Chapter 7 would be a favorable alternative. If
you are represented by an attorney already, however, you do not want to
convert your case without first speaking with your attorney.
The
second option, if you no longer want to make payments on your Chapter 13
bankruptcy, may be a voluntary dismissal. This is an option that is
usually available to debtors at any time. If a person filed for Chapter
13 in an attempt to catch up with car or mortgage payments and is
successful, they may no longer want to be in Chapter 13. In this option,
debtors are no longer required to make monthly payments. However, if
this is carried out before, they will not receive a discharge.
Another
option is to amend the Chapter 13 plan. Options in amending the plan
can be as simple as adjusting the payment schedule, reducing the monthly
payments, or even extending the length of a plan. There are some
limitations on these changes. For example, you cannot extend the length
of the plan for more than five years from the time of your first
payment. However, if you have a reduction in pay due to a decrease in
income, the amount of your monthly payment can be changed. The process
involves a motion to amend the plan to the Chapter 13 trustee and all
involved creditors.
You get one chance to file bankruptcy right
the first time. The attorneys at Borowitz & Clark know what they’re
doing, because bankruptcy is all they do. Unlike many firms, they never
leave a paralegal or secretary in charge of a case. That’s why their
cases succeed at such a high rate