Many clients who file Chapter 13 may find their circumstances change as the years tick by in a five year Chapter 13 plan. They may get a divorce, have a new baby or their child may head off to college. With those life changes, the financial picture changes too.
What Options Are Available?
The best thing you can do is call your attorney. Your attorney will be able to assess your new situation and offer options that give you breathing room.
Modify Your Plan
A few options are that you may be able to modify your plan to surrender the car that no longer is needed or is costing more to repair than it’s worth. You may be able to recalculate the Chapter 13 plan payments if your income or expenses have changed.
Change Your Plan
If modification is not a good option, converting your case to one of Chapter 7 if you have not filed within eight years may be an option. Chapter 7 would then eliminate unsecured debts and allow you to pay for the items you want to keep like a car or house. Most creditors would require you to be current on the debt in order to reaffirm by signing a new promise to repay the debt post-bankruptcy.
The bottom line is this—Call your attorney if your circumstances have changed. Bankruptcy is designed to help you with your finances. If you are struggling with making your Chapter 13 payments, contact your attorney to see if there may be an option available to help you.
Should you need any financial assistance with your finances, please contact one of our Bond & Botes offices today for a free consultation.
Gail Hughes Donaldson is a Managing Partner of the Bond & Botes Law Offices in Montgomery and Opelika, Alabama. She holds a Bachelor of Science from Auburn University at Montgomery, and a Juris Doctorate from Thomas Goode Jones School of Law. She’s been helping families work through the bankruptcy process since she started with Bond & Botes back in 1993 as a paralegal. Read her full bio here.