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Advice if Struggling with Chapter 13 Payments - The Bills.com Blog
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Advice if Struggling with Chapter 13 Payments
Question: I am presently in a Chapter 13 Bankruptcy, and have fallen very far behind. I have been a Full Time Student since November 6, 2006. I need to find a full time job to be able to continue making my Payments, but I also need to finish School. I am due to Graduate on April 21, 2008. My TRA weekly Benefits end on March 22, 2008. I need adviceon what would benefit Me the Most. What are My Options? It seems like I am running across all kinds of People ready to help Me, if I was Not in a Bankruptcy. Please HELP!!!
Answer: You should consult with your bankruptcy attorney as soon as possible to help you determine the best course of action available to you in this situation. Since you are no longer able to afford your monthly bankruptcy payments, I assume that your income has decreased significantly since you first filed for Chapter 13 bankruptcy protection. If that is the case, then you may be able to convert your Chapter 13 case to a Chapter 7, which may allow you to discharge your debts, depending on the type of debt you owe, and therefore end your monthly Chapter 13 payments. Again, you will need to speak with your attorney to determine if a conversion from Chapter 13 to Chapter 7 is advisable, or even possible, in your situation.
Unlike a Chapter 13 bankruptcy, which requires you to make monthly payments to your creditors, a Chapter 7 generally discharges
most unsecured debts, so if your debt is mostly comprised of credit card or other unsecured debt, a bankruptcy conversion may be able to help you. However, if the debt in question is secured debt, tax debt, or delinquent student loans, you will not be able to discharge your debt under a Chapter 7, so a conversion would probably not make sense. To learn more about bankruptcy, and the different types of bankruptcy available to consumers, I encourage you to visit the Bills.com Bankruptcy Resource Center .
You should know that there are alternatives to bankruptcy, such as credit counseling or debt settlement, which may be able to assist you if you are struggling to pay your monthly obligations to your creditors. These programs focus primarily on unsecured debt, such as credit cards, rather than on secured or other priority debts, such as taxes or student loans. If credit cards are the primary source of your financial woes, one of these bankruptcy alternatives may be worth considering. To
learn more about these programs, I invite you to visit the Bills.com Debt Help page . However, I would caution you against enrolling in one of these programs before consulting with your attorney about what options are available to you to lighten the burden of your Chapter 13 payments.
As I mentioned previously, a conversion of your Chapter 13 to a Chapter 7 may be the best option available to rid yourself of the expensive Chapter 13 payments. However, you must discuss this option carefully with your attorney before deciding to go down that path. If you own assets such as a home or expensive vehicle, you may be forced to sell the property in a Chapter 7 plan, so you and your attorney will need to decide if a conversion is a practical option for you. Whatever you decide to do, I wish you the best of luck in resolving your debt problems, and hope that the information I have provided helps you Find. Learn. Save.
Best,
Bill
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