If you filed for a Chapter 13 bankruptcy, this was likely the ideal option for you because of your ability to reorganize debts and get current on your payments. Unfortunately, sometimes things don’t work out as planned, and it’s possible to fall behind on Chapter 13 plan payments just as you fell behind on bills. Even if you filed for Chapter 13 with the help of a Dallas bankruptcy lawyer, life has many variables that can impact your ability to stick to the payment plan.
What to Do if Chapter 13 Backfires
While there’s a limit to how often you can file for bankruptcy, there are fortunately many options available if you’re unable to make payments in accordance with your Chapter 13 payment plan. Of course, meeting with your bankruptcy lawyer will give you a better understanding of all the options moving forward if your current Chapter 13 plan isn’t working. Here are a few of the solutions:
Modify your Chapter 13 plan. Chances are that you fell behind on your new payment plan because of a temporary financial emergency. If this situation doesn’t appear to change anytime soon, then you can ask the court to lower your monthly payments with the help of your bankruptcy lawyer. You and your bankruptcy lawyer can investigate your new budget and propose a new payment plan that incorporates the new circumstances.
Switch to a Chapter 7. Just because you and your bankruptcy lawyer filed for a Chapter 13 bankruptcy, it doesn’t mean that it’s locked in stone. Yes, if your finances are no longer healthy enough to afford a Chapter 13 bankruptcy, you can convert it to a Chapter 7 with the assistance of your bankruptcy attorney. However, your priority debts are unlikely to be discharged.
Hardship Discharge. If your financial situation has changed so much that you are unable to continue your Chapter 13 bankruptcy, you may qualify for a hardship discharge. With the help of a bankruptcy lawyer, you can present your case to the court to have your new financial predicament analyzed. If it’s in the best interest of all parties, everything but your priority debts will be wiped.
If none of these options work, then discuss the possibility of dismissing your case and re-filing with your bankruptcy lawyer.