Chapter 13 bankruptcy may allow you to keep important assets and discharge debts. However, it does require you to complete a three to five-year repayment plan. Unless this repayment plan is completed, the court will not allow you to discharge debts. In addition, creditors could seize your assets. Therefore, it is essential to complete the Chapter 13 repayment plan.
There are several ways you can improve the odds of completing the payment plan, such as:
- Setting up automatic payments: According to research, districts that require automatic payments have higher Chapter 13 bankruptcy completion rates. In fact, out of the top 20 percent of districts with the highest completion rates, nine require debtors to make automatic payments. Instead of writing a check to the trustee each month, debtors have payments taken straight from their bank accounts.
- Follow your budget: It is essential to stick to your budget while making your Chapter 13 payments. Avoid taking on new debts, as it could derail your budget and increase the chances of missing your Chapter 13 repayments. Always notify your attorney if your financial circumstances change.
- Pay attention to paperwork: Do not ignore mail sent by your attorney or the trustee. It could contain very important information, such as a creditor seeking relief from the automatic stay.
What if I Cannot Make My Chapter 13 Payments?
If your circumstances change and it becomes too difficult to make payments, there are a few options. Your attorney could ask the court to modify your plan so you have lower monthly payments. Depending on the circumstances, it may also be possible to receive a hardship discharge. In addition, you may have the option of converting your case to Chapter 7 bankruptcy. If Chapter 13 payments have become too difficult, an attorney can help you find the best option for your situation.
The Kansas City bankruptcy attorneys at The Sader Law Firm can help you discover the options for managing difficult financial situations.