Under a Chapter 13 bankruptcy filing, you agree to repay what you owe via a monthly payment plan. However, circumstances beyond your control can make it difficult to stay current. Fortunately, you still have options for repaying the debt and protecting your financial future, as long as you act quickly. This guide outlines the steps you can take to manage your obligations, so you can get out of debt.

Adjust the Payment Plan

Losing a job or experiencing an emergency can have a serious impact on your financial resources. However, bankruptcy courts tend to be understanding about these situations. If a setback has a profound and lasting effect on your ability to keep up with an existing Chapter 13 plan, you can request a modification of the monthly payment obligations. Your bankruptcy lawyer will help you propose a figure that is more realistic given your new financial constraints, then submit a revised petition to the court for consideration.

Change to Chapter 7 Bankruptcy

You also have the option of converting your Chapter 13 bankruptcy to a Chapter 7 filing. This is essentially an entirely new bankruptcy case, so a new trustee will be appointed. You will be required to submit proof that your financial situation has changed and is now preventing you from fulfilling your repayment obligations. This method has some potential drawbacks, especially if late mortgage payments were part of your Chapter 13 plan. Converting to Chapter 7 puts you at risk of foreclosure.

Ask for a Hardship Discharge

A hardship discharge eliminates Chapter 13 bankruptcy obligations because of a serious, unforeseen emergency. If granted by the courts, the debts are wiped away, no matter how much you have already repaid. There are very stringent requirements for this discharge, and being approved for one will not eliminate certain types of debts like late child support and alimony payments or taxes.

If you are struggling to keep up with Chapter 13 bankruptcy payments, then let Mark Briden Law in Redding CA, help you find the most effective solution. Since 1987, this legal team has been helping clients understand their options and get a fresh start. Call (530) 222-1664 to schedule a free consultation. Visit the firm online to learn more about how they can help you manage debt and regain your financial stability.