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Proving that Failure to Complete Payments Is Out of Your Control
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Failure to complete payments in a Chapter 13 bankruptcy may result in discharge. In a Chapter 13 bankruptcy, individuals work through a process which outlines what their income and expenses are. The plan creates a monthly budget. The plan states a specific payment that debtors pay on a monthly basis to pay down their debt balance. In general, this plan will continue for three to five years until all required debt is repaid. However, there are instances when you simply cannot make these payments.
When Failure to Complete Payments Occurs
After the bankruptcy repayment plan is put into place, the debtor enters repayment. Over the next months and years, he or she will work to make monthly payments towards the debt to the bankruptcy court. However, circumstances can change in that repayment period that may make it impossible for the debtor to repay his or her debt. When this occurs, the debtor can petition the court for discharge of the debt, meaning he or she no longer believes it can be repaid in the current plan.
However, there are very few reasons why this may occur. In fact, it is quite common for the courts to deny discharge when a failure to complete payments occurs. Prior to this occurring, the court must see evidence that adjusting the repayment plan would not help, nor would making other concessions.
In order for you to prove failure to complete payments, the following must occur:
- The debtor must show he or she does not have the means to repay the debt, even when the repayment plan is modified by the court.
- The creditors have received at least what they would have received through a Chapter 7 bankruptcy discharge.
- The debtor's inability to meet the debt repayment is due to circumstances beyond the debtor's control.
- The reason for the inability to repay the debt must be beyond the debtor's control.
A good example of a reason why failure to complete payments may occur is when the debtor becomes ill and no longer can work. However, if there is reason to believe that the debt can still be repaid over five years, a discharge of the debt may not occur.
Hire an Attorney
Failure to complete payments may place your in contempt of court, unless you have a qualified reason for doing so. An attorney can help you to prove to the court that you are unable to complete payments. The attorney can help ensure the debt is discharged if possible.
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