What Are My Options When I Can't Make My Payments in Chapter 13 Bankruptcy?

Can’t Make Your Chapter 13 Bankruptcy Payments?

There are several options to review should you become unable to make payments as part of your Chapter 13 bankruptcy plan.

Usually, the creditor or trustee may look to have your case dismissed, but the following options may be considered to help keep your case active:

  • Get caught up on payments- If you fall behind due to a financial emergency you may be able to get your payments current before your case gets dismissed.  You may also look into asking the court to give you more time to get payments current by explaining your circumstances.
  • Make modifications to your Chapter 13 payment plan– This presents an opportunity to get your payments reduced.  You may need to review your current financial situation with the court and propose a new payment amount that is affordable while being something you can commit to.
  • If you can’t continue making payments a hardship discharge request can be submitted to the court-  While the action doesn’t wipe off or eliminate all outstanding debt as part of the repayment plan, the court will review your situation and determine the best course of action to satisfy all parties involved.
  • Have your case converted to a Chapter 7 bankruptcy- Similar to the hardship discharge request but with additional qualifications, this action may allow you to discharge debt sooner.  Upon converting your case you’ll need to provide proof that Chapter 7 is the best option for you, such as changes in finances that are preventing you from making payments in Chapter 13 or the need to get rid of certain debts in order to sustain priority payments.
  • Refile another Chapter 13 when the case is dismissed- If previous options mentioned didn’t provide a solution for your situation, it may be best to dismiss and refile your case when your cash flow improves.