What are My Options If I Can’t Make My Chapter 13 Payments?

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Struggling with Chapter 13 payments can feel overwhelming, but it’s essential to remember that you have options available to help you overcome these challenges. In this guide, we’ll explore what happens if you miss a payment, how to request deferment or suspension, the possibility of a hardship discharge, and the option to convert your case to Chapter 7 bankruptcy.

Understanding Chapter 13 Payments

Chapter 13 bankruptcy offers individuals with a regular income the opportunity to create a repayment plan to settle their debts over a period of three to five years. This structured approach allows debtors to retain their assets while gradually repaying creditors. However, maintaining consistent payments throughout the duration of the plan is crucial for its success.

Consequences of Missing Payments

Missing a Chapter 13 payment can have serious implications for your bankruptcy case. While one missed payment may not immediately lead to dismissal, repeated delinquencies can jeopardize the entire process. The court may choose to dismiss your case, leaving you vulnerable to creditor actions, such as foreclosure or repossession. It’s essential to address missed payments promptly to avoid further complications.

Options for Deferment or Suspension

If you anticipate difficulty making future payments due to temporary financial hardship, you may be eligible to request deferment or suspension from the court. Deferment allows you to postpone missed payments to the end of your repayment plan, effectively extending its duration. Suspension, on the other hand, temporarily halts future payments, providing relief during periods of financial instability, such as job loss or medical emergencies.

Exploring Hardship Discharge

In cases of extreme financial hardship, you may qualify for a hardship discharge in Chapter 13 bankruptcy. This option allows for the discharge of remaining debts if continuing with your repayment plan would cause undue hardship. However, obtaining a hardship discharge is not guaranteed and requires a thorough evaluation of your financial circumstances by the court. Additionally, this discharge may have long-term consequences on your credit and financial standing.

Considerations for Converting to Chapter 7

If your financial situation has significantly deteriorated since initiating Chapter 13 bankruptcy, converting your case to Chapter 7 may be an option worth exploring. Chapter 7 bankruptcy involves the liquidation of non-exempt assets to repay creditors before granting a discharge of remaining debts. While this option provides a fresh start for individuals burdened by overwhelming debt, it’s crucial to carefully weigh the implications and seek professional guidance before proceeding.

Conclusion: Seeking Guidance and Support

Managing Chapter 13 payments can be complex, especially when facing financial challenges. However, you don’t have to navigate this journey alone. Seeking assistance from a qualified bankruptcy attorney can provide invaluable support and guidance as you work to address missed payments and explore alternative solutions. Whether you need help requesting deferment, understanding hardship discharge eligibility, or considering a conversion to Chapter 7, a knowledgeable attorney can help you navigate the process with confidence.

If you’re struggling with Chapter 13 payments or have questions about your bankruptcy case, don’t hesitate to contact us. We’re here to help you regain control of your financial future and achieve lasting debt relief.

If you would like more information, contact us at 913-422-0909 or visit our website www.kansascitybankruptcy.com. At W M LAW, we are “Here to Help”.

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Jeffrey L. Wagoner


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