Change Your Chapter 13 Bankruptcy Payment

by L. Jed Berliner

Yes, Virginia, you CAN change your Chapter 13 bankruptcy payment if
something changes in your situation.

Chapter 13 requires a monthly payment from three to five years. It
allow you to cure arrearages for mortgages, car loans, taxes, or
family support, or pay what you are required to pay under the Means
Test. A portion of the money may go to general creditors, like credit
cards.

There's a common fear that those payment is written in stone for the
full length of your case. That's just not true.

Any decrease in income or increase in expenses can support a modified
or amended plan where you pay less. Lower income could result from a
cut in pay or change of jobs, or increased costs for work benefits
such as health insurance. Increased expenses might result from car
maintenance for a car as it gets older, or raising a child as the
child gets older, or a medical condition or simply an increase in
medical co-payments.

If you need to pay a fixed amount to cure a certain arrears, then
perhaps you can pay less for a longer time up to the five year maximum
and achieve that cure.

The payment can end entirely with a Chapter 13 hardship discharge or
conversion to Chapter 7, but you do not get the benefit of curing a
loan's arrears if the cure is not completely paid.

Some jurisdictions allow a suspension of the payment in the event of
a short term problem, like changing jobs or moving or a sudden and
large medical or repair expense. Under a suspension, the total of all
payments does not change and the extended payments can never exceed
the five year maximum.

Here's my point. You file a Chapter 13 case for whatever the reason
is. Don't be afraid of being stuck with the original payment. The
payment can change if your situation changes.

Jed Berliner is a Massachusetts bankruptcy and foreclosure defense attorney.

For more information on these matters, please call our office at 305 548 5020.

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