What are my options if I'm unable to make one or more Chapter 13 payments?

Chapter 13 payments are required to successfully discharge and repay your debts. Thus, without your chapter 13 payments, your bankruptcy case can be dismissed. Worse, the automatic stay the U.S. Bankruptcy Courts grants you can be lifted. For instance, you can make the payments before the bankruptcy trustee notices. However, you can also request a chapter 13 modification. This means that the U.S. Bankruptcy Courts will suspend your payments for a specific amount of time such as six months. This will extend your bankruptcy period, but allow you to avoid a dismissal or motion to lift the automatic stay.

If you missed payments are do to extenuating circumstances, you may be eligible for a hardship discharge. Typically, these circumstances are because of a sudden job loss or debilitating illness. In other words, circumstances that may be long-term or have an impact on your ability to make money are reasons that you are granted a hardship discharge. This means that your debts are discharged earlier than your required chapter 13 bankruptcy period of 36 to 60 months.

In certain situations the U.S. Bankruptcy Courts won’t allow you to modify or discharge your chapter 13 plan. You may decide to dismiss your bankruptcy or try to convert your chapter 13 into a chapter 7. However, those are last resort options you have.

So, you do have options you can choose before your chapter 13 is dismissed or the stay is lifted. If you’re unable to make one or more of your chapter 13 payments, talk with your lawyer.