Bankruptcy Can Offer The Relief You Need

Can I convince a court to lower my Chapter 13 payments?

On Behalf of | Nov 30, 2021 | Bankruptcy, Chapter 13

Creating a plan to pay off most of your debt is a crucial part of Chapter 13 bankruptcy. While you hopefully will complete the plan with no problems, unexpected life events may impede your ability to make payments. Fortunately, Chapter 13 bankruptcy offers flexibility for debtors who experience sudden changes in fortune.

Bankrate explains that in the event you experience a loss of income or suffer injury or incapacity, you have the option to ask your bankruptcy judge to adjust your payment plan so that you can pay lower amounts or defer your payments to a later date.

Reasons to lower your payments

A judge will look at different factors to determine whether to reduce your payments. You may support your case by showing increases in your expenses and a decrease in your income. Your bankruptcy judge may also look at how much nonexempt property you currently own.

Your judge will likely consider your employment circumstances, like whether you recently had to take a job with lower pay or if you work as a self-employed person but have lost customers. Alternatively, an auto accident may have injured you and made it impossible to work while you recover.

Requesting a hardship discharge

If your situation deteriorates, even lowering your payments might not be enough. In this case, you may ask your bankruptcy judge to grant you a hardship discharge. After reviewing your situation, your judge might bring your bankruptcy to an early close by discharging your eligible debts. Keep in mind that a hardship discharge will not cover debts like overdue child support, so be aware of how much debt you will have left after the discharge.

Review your case with care

You should review your assets and income carefully to make sure a judge does not have a reason to think you can pay more than your current plan requires. If the judge determines that your expenses have diminished or that you are earning more in income, you might see an increase in your payments instead.

For this reason, you should review your situation to make sure your request to lower your payments does not backfire. Still, the options available to alter your payment plan should make you feel better about Chapter 13 bankruptcy since you may seek changes in the event the unexpected happens.