Several thousands of workers across the nation have been laid off already due to the shutdown resulting from the COVID-19 pandemic, with many more expected before the tide is turned. If you are one of those workers, and happen to be in Chapter 13 bankruptcy during COVID-19, then you’re probably wondering about more important things right now than your monthly plan payments to the Chapter 13 trustee.
If you are just not able to make any payments right now to your payment plan, don’t think all is lost.
The Chapter 13 trustee and the bankruptcy judges are all very in tune with what’s going on around the world and in the Kansas City area and understand that many debtors here will not be able to make plan payments right now due to COVID-19. The trustee’s office in our area will probably not file a motion to dismiss right now if you miss a payment or two because of the circumstances.
If you just aren’t able to make any plan payments, then so be it. It’s more important to take care of you and yours before making a payment to the trustee.
If you are able to make a partial payment (e.g., half) that would be better than making no payment at all. Making a partial payment would keep you from falling too far behind and will make it easier later to suspend/abate payments and to modify your remaining payments over the rest of your plan if necessary.
If you have lost your job during this time, you might also consider converting your case to a Chapter 7. Our attorneys can advise you if this is a possibility.
If the case eventually does get dismissed due to the payments being too far behind, you can see about filing another Chapter 13 soon thereafter. Filing a new plan might be an especially good idea if you have fallen behind on mortgage payments or have incurred additional debts (e.g., medical) during this time.
Please seek a free phone consultation to discuss your options with one of our attorneys.