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What can I do if I cannot make my Chapter 13 bankruptcy payments?

When you file for Chapter 13 bankruptcy in Eugene, Oregon, you pay monthly payments to a trustee, and these are applied to your debt. Although the Chapter 13 plan should give you manageable payments, the percentage of your income that goes to the trustee each month may make taking care of emergency situations difficult. Defaulting on the payments can have drastic consequences, such as dismissal of your bankruptcy, so it is essential that you address the issue with your trustee before you fall behind.

Fortunately, Oregon law allows you to take steps to prevent your Chapter 13 bankruptcy from being dismissed. Authorization for a missed payment can only come from the bankruptcy court. Even if you have already missed payments and the trustee has filed for dismissal, it is possible for you to rectify the issue. Once you demonstrate to the trustee and the judge that you can make up the lost payments, you may be granted time to do so.

If there is a life-changing event such as a job loss that has affected your ability to pay, it may be possible to get your payment plan modified in court by explaining your new circumstances. However, when your payment is largely made up of non-dischargeable debts such as taxes or back child support, those debts have priority and must be included in the plan. If reducing the payment negatively affects a secured debt such as a home, it may make it impossible for you to retain the property because house payments cannot be changed.

There is a possibility that you may qualify to convert your Chapter 13 bankruptcy to a Chapter 7 and liquidate all your dischargeable debts if it is impossible for you to continue the payment plan. You may qualify to receive a hardship discharge of some or all of the debts. This information about bankruptcy payment plans is provided for educational purposes only and should not be considered legal advice.

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