If you have a Chapter 13 bankruptcy repayment plan and struggle to meet your obligations, you can ask the court to modify your agreement. Most Chapter 13 plans pay out in three to five years, so you might have room to stretch your payments. The bankruptcy court judge will decide if you can modify your schedule.
How to change your Chapter 13 payments
Filing a motion to suspend or modify your payments can adjust your Chapter 13 agreement. This motion has a fee for your bankruptcy attorney, so it’s best to only file this motion when you decide you cannot make your payments. Considering at least a partial payment is an alternative option.
Suppose your income has decreased, and you can’t keep your bankruptcy repayment obligation. In that case, you might consider asking for a hardship discharge, a Chapter 7 conversion, or a dismissal for your current case so that you can refile a new Chapter 13 claim.
The judge decides how the hardship discharge will impact your creditors. Chapter 7 discharges all non-exempt property, and the hardship discharge allows you to restart a Chapter 13 claim. Either of these options includes additional attorney fees and court costs.
How to lower your Chapter 13 payments
You can ask the court to reduce your payments. The judge will review your case and the evidence that supports your need to lower your payments. If you have paid off some debts and received an income increase, the judge can decide to increase your payments rather than reduce them. The best decision would be to review your budget and choose the best option for you.
