Although the confirmation of your Chapter 13 bankruptcy was undoubtedly an enormous weight off of your shoulders, issues can arise that would make paying all of your bills in full and on time challenging. Sadly, employment changes or other financial setbacks have impacted the ability of many Chapter 13 bankruptcy applicants to remain in good standing on their debt agreement plans. Fortunately, you may be eligible for a short or long-term reduction of your payments and it's a good idea to discuss the following information with your Chapter 13 lawyer as soon as possible.
Understanding The Most Common Situations That Are Eligible For Payment Reductions
It is important to note that, in general, there are only specific situations that are eligible for the reduction of payments after the confirmation of a Chapter 13 bankruptcy has been confirmed. For example, given that the typical Chapter 13 bankruptcy takes three to five years to complete, you might find that changing jobs that resulted in less income or another change that caused a reduction in the household income permits you to reduce your payments.
Alternatively, certain new bills or debts might have a similar impact. Significant and appropriate medical expenses are often valid reasons for reductions, as is the growth of your family size in some instances. However, it's essential to know that you must apply for those changes and must continue to make the agreed-upon payments until the changes are approved.
Planning For The Details Of Your New Payment Plan
Even though you will undoubtedly be happy to know if you can be moved to a lower payment, you should also be aware that the time period for that reduction may not last the full length of the rest of the time you have before your bankruptcy has been closed out. It also does not impact the amount that you owe or the time period before the full amounts need to be paid, but might give you a brief break in those payments due to unfortunate changes.
A Chapter 13 bankruptcy can never take more than five years from the first day that it went into effect and the time period allotted to you to pay off the required debts was based on your income at the time of your application. That means that if your agreement is already for five years, you will still have five years of payments and not paying one or more of those payments in full now means that you can typically expect to make up the difference in those payments later on.
In conclusion, the use of Chapter 13 bankruptcy has permitted many people and businesses to create a new and better financial future. However, if unexpected financial problems might keep you from being able to comply with your repayment agreement, it's best to determine if the above information is time to determine if your attorney can help you to reduce your monthly sums.